Clinton's auditor flagged its general fund balance; council weighed a new audit committee

The auditor who reviewed Clinton's books for the year ended June 30, 2025, told the City Council in January that the general fund balance was slightly above state thresholds, according to the council's minutes. ^[3]

The general fund ended that year with a $6,190,511 fund balance. Of that, $6,034,586 was unassigned, and the fund took in $15,871,094 in revenue. The unassigned figure equals about 38% of that revenue. ^[1]

The limit

A 2021 state law, H.B. 128, raised the cap on a city's general fund balance from 25% to 35%. As amended, the law says the accumulation of a fund balance in the general fund "may not exceed" 35% "of the total revenue of the city general fund for the current fiscal period." ^[2]

What the auditor and officials said

Ryan Child of Child Richards CPAs & Advisors presented the audit on Jan. 27, 2026, and reported an unmodified opinion. The minutes record him noting "one state compliance item related to the General Fund balance slightly exceeding recommended thresholds." ^[3]

City Manager Trevor Cahoon attributed the balance to conservative revenue projections, capital planning needs, timing differences and deferred expenditures. He said excess balances must be tied to a specific purpose or addressed through future budgeting, according to the minutes. ^[3]

Councilmember Chris Danson asked for quarterly financial reviews. Cahoon said staff "is working toward providing quarterly budget-to-actual reports and projections." Mayor Marie Dougherty asked that a quarterly budget review, an analysis of past budget accuracy and a way to publicize audit highlights return as action items at the end of February. ^[3]

The minutes record no vote on the audit. ^[3]

A proposed audit committee

The council's Sept. 22, 2026 agenda included Resolution 23-26, which would create an audit committee advisory to the council. Under the attached policy, the committee would have two council members and one public member with finance, accounting or auditing experience, appointed by the mayor with the council's advice and consent. ^[4]

The policy says the committee would meet at least twice a year under the state's open meetings law, keep written minutes, and serve without pay. Its duties would include evaluating the independent auditor, reviewing final audit results and the fraud risk assessment, and assessing internal controls and financial reporting. ^[4]

Staff recommended Danson, Councilmember Dane Searle and a public member, Scott Parke. The Ledger has not obtained the Sept. 22 minutes and has not confirmed the council's vote. ^[4]