The city received an audit that had no exceptions and showed a strong fund balance.

The otherwise strong audit report was marred, however, by two material weaknesses and a significant deficiency, which have been corrected, the city’s auditor, Gregory Redman, said at this evening’s city council meeting.

At the time of the audit, the document notes, the general fund bank account was not reconciled and the general ledger amount did not match the bank statement reconciliation by $124,367.

Prior to the completion of the audit, the city properly reconciled the bank statements to the general ledger, according to the report.

Redman did not give an explanation of what occurred but noted in the report the city agreed with the weakness and implemented procedures to properly reconcile the bank account on a monthly basis.

The second material weakness was in the capital assets account and it was not being reconciled during the year to properly record additions and disposals, the report said.

The cause, according to the report, is that current capital asset accounting software is difficult to maintain and recommends the city should explore additional accounting options for capital assets. Once new software is purchased or a decision is made to manage the current software, a physical inventory of capital assets should be taken to ensure proper accountability. The city concurred with that finding.

The significant deficiency related to a prior period adjustment in the amount of $53,421 that had to be made in the Roanoke Canal Museum fund.

The cause of this problem was a journal entry was made in prior years to record an accounts receivable when no adjustment was necessary.

Despite the weaknesses, the city’s financial numbers were strong, the report indicates.

The city ended the past fiscal year with a fund balance of $7,583,838. The unassigned fund balance is $4,218,104, which Redman said is 56 percent of the budget.

One item of note was city revenues exceeded expenditures by more than $1 million when the city had expected expenditures to be $751,000.

The city inched closer to the state-mandated tax collection rate of 97 percent. The actual tax collection rate is 96.5 percent.

Mayor Emery Doughtie said following the meeting he was pleased with the overall results of the audit. “There were some things not reconciled but nothing that couldn’t be taken of.”

City Manager Joseph Scherer said the audit showed that both council and department heads worked together to bring more fiscal responsibility to the table. Getting the deficiencies behind them, Scherer said he wants the finance department next fiscal year to shoot for an excellence in auditing citation from the state.