State Treasurer Notes Ann Arbor Audit Issue

Attached to the Ann Arbor city council’s Feb. 6, 2012 meeting agenda is a letter from the state of Michigan treasurer’s office dated Dec. 29, 2011 noting that the city’s audit for the 2011 fiscal year (which ended June 30, 2011) had “repeated reported deficiencies from previous years.” The letter also stated: “There were reported deficiencies included with the audit report.” The state treasurer requests that the city respond with a “corrective action plan.”

The deficiencies are not “material weaknesses,” and do not affect the auditor’s unqualified or “clean” opinion. The deficiencies relate to proper controls and documentation on usage of procurement cards (P-Cards). [For detailed reporting on the audit, including the P-Card issue, see Chronicle coverage: "Audit is Unqualified 'Clean' But P-Card Problems Persist"] In the city of Ann Arbor’s response to the state, sent by chief financial officer Tom Crawford on Jan. 19, 2012, the P-Card issue is acknowledged. In the letter, Crawford notes: “As of May 2011, every P-Card statement is reviewed by a single individual who confirms all documents and policies are in compliance. A review of this new procedure has indicated that requirements have been met to date.”

Crawford’s statement to the state treasurer’s office is corroborated by the auditor’s remarks on the issue, which are included in the FY 2011 audit report:  ”… the city changed its review in May 2011 so that every statement is reviewed by a single individual who is confirming that all documents and policies are being complied with. A review of this new procedure has indicated that requirements have been being met since May. ” [.pdf  of Crawford's response and the state treasurer's letter]