For the 16th year, the City of Kingsport’s finance staff brings home the Certificate of Achievement for Excellence in Financial Reporting, awarded this year for the FY2015 Comprehensive Annual Financial Report (CAFR). Given by the Government Finance Officers Association, this makes Kingsport one of only 8% of government organizations to receive this prestigious award.
A CAFR is a detailed review of city government including schools from a financial perspective. It covers thirty-six separate funds and all manner of financial issues from debt to assets.
Another long-standing achievement is a clean or unmodified opinion. The city once again received a clean opinion on the Fiscal Year 2016 CAFR, the highest opinion a CPA firm can issue. This is the 18th year in a row receiving the highest opinion.
Last year, a material weakness was cited as the city was not closing capital projects fast enough after completion. The city has made progress in that area and now that deficiency has been removed.
This year, the auditors found only one material weakness. The city failed to properly identify expenses related to a federal grant. Even with the complexity of federal grants, the city has already rectified this matter. Although not recording the grant revenue in the correct year is a material weakness, the city was never at risk of losing the grant money. It was a timing issue whether the revenue was recorded in FY2016 when earned or FY2017 when received.
Also the auditors found only one compliance finding. Kingsport City Schools (KCS) failed to properly classify between free and reduced meals. KCS responded by doing an internal review. They manually calculated 500 applications and did not find any that had been calculated incorrectly. They believe this to be an isolated incident.
The Audit Committee Chair and Vice Mayor Mike McIntire noted that the audit was “exceptional” considering we only encountered two minor issues that were easily corrected.
S&P reaffirmed the City’s AA bond rating, and more importantly, received an upgrade of financial management assessment from “good” to “strong” due to financial management policies put in place by the BMA. The BMA adopted a financial management and fund balance policy. They also made progress on replenishing the “rainy day” fund over the past two years.
“Our staff deserves a tremendous amount of praise, because they are doing an excellent job of maintaining consistent reporting at the highest level,” said City Manager Jeff Fleming. “A special thank you to Jim Demming, Judy Smith, Lisa Winkle and Sid Cox for their diligence.”