ACC receives unmodified opinion in Fiscal Year 2026 audit
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ALPENA -- The Fiscal Year 2026 audit for Alpena Community College done by Straley, Lamp, and Kraenzlein P.C. was returned with an unmodified opinion.
The audit was presented by CPA Chelsea McConnell at the ACC Board of Trustees meeting on Thursday. An unmodified opinion is the highest opinion that an auditor can give, showing no concerns in an organization’s financial reports.
McConnell reported that there was a change in accounting principle this year, and that was Governmental Accounting Standards Board (GASB) statement no. 103.
GASB statement no.103 establishes stricter, more precise definitions for operating versus nonoperating revenues and expenses.
In the analysis of statement of revenues, expenses, and changes in net position, McConnell explained that prior to 103, operating revenue was a defined category, and if a type of revenue didn't fit in operating revenue, it defaulted to non-operating revenue.
GASB 103 reversed that and defined noncapital subsidies and other nonoperating revenues. Now if a revenue category doesn't fit those classifications, it is categorized as operating revenue.
She said overall there was an increase in operating revenues, mainly due to an increase in tuition and fees.
McConnell discussed significant estimates that were made in the financial reports. She said that auditors check if the estimates made are reasonable in categories like cash balance, for example.
She pointed out that the significant estimates in ACC's report are capital assets, pension and Other Post-Employment Benefits (OPEB), allowance for uncollectible receivables, and compensated absence liability.
McConnell reported that there were no difficulties in performing the audit, no uncorrected adjustments, and no disagreement with management during the course of the audit.
She said that she obtained management's representation, that she obtained a formal written statement from management confirming that the financial statements are accurate, all records have been handed over, and no material information or fraud has been hidden.
McConnell reported that she did not consult with any other auditors over the course of the audit.
She explained the process of internal control testing, saying that an auditor takes sample transactions and traces them through the supporting documentation and accounting process. She also looks at what the procedure is and what controls are in place. During the test, she then checks if all controls were followed, if they are operating as intended, and if any have been bypassed or circumvented.
McConnell said she did not find any deficiencies in internal control considered significant deficiencies or material weaknesses.