FLINT, Mich. (Michigan News Source) – The city of Flint has historically been plagued with financial problems when it comes to how it manages its budget.

The Flint water crisis and emergency manager imposed by the state a decade ago were byproducts of financial mismanagement.

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Today, the city still struggles with its finances.

Missed deadlines.

A symptom of that is their failure to file its fiscal year 2023-24 annual audited budget with the state now seven months past a state-imposed deadline.

The fiscal year for the city of Flint ends June 30 every year. The deadline to file annual audits is December of that same calendar year, something many municipalities routinely meet.

Then there’s the city of Flint. On Jan. 2, 2025, the city asked the Michigan Department of Treasury for an extension. It was granted and the state said the audit report was due no later than Feb. 3, 2025.

As of Sept. 9, the city still has not filed it. The city has paid the auditing firm Rehmann Robson $306,000 to complete the audit.

“The Michigan Department of Treasury is collaborating closely with the city of Flint as a trusted partner to ensure the submission of a complete and thorough Fiscal Year 2024 audit,” said Ron Leix, a spokesman for the Treasury Department. “We recognize that the city’s financial landscape is complex, and we remain optimistic that the audit will be received in the near future.”

Cause and effect.

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According to a state website, Flint’s 2022-23 audit wasn’t submitted to the state until November 2024.

In its last audit, the auditor noted several issues with the city’s financial team.

In one example, the auditor stated the city wasn’t properly tracking its capital assets.

Rehmann wrote:

“Cause. This condition arose due to several factors: inaccurate data entry, insufficient coordination between
departments, irregular reconciliation processes, and inadequate management oversight. Consequently, internal controls failed to identify all necessary adjustments to accurately record year-end balances.
Effect. Consequently, the reliability of financial statements was compromised, potentially misleading stakeholders and affecting decision-making processes. As a result of this condition, the audit process was
delayed and the City’s accounting records were initially misstated by amounts material to the financial statements.”

More problems.

The auditor also noted the city didn’t adopt a budget before the fiscal year began, as required by the state. The city was regularly not shutting off utility accounts to customers who had not made payments in more than six months. Bank reconciliations were not done within the six-week period as required by the state. The city had $883,562 in outstanding checks more than a year old in its bank account.

The city didn’t have a “proper process in place” to identify drug seizure cases and didn’t update when cases were closed.

The city removes the auditor’s comments in its version of its audit it puts on its website.

Rehmann stated it could not comment on specific situations because of client confidentiality. It directed inquiries to the city. The city said it would soon provide a date when the audit would be submitted.