Forest Park has passed its annual audit, which declares that the village complies with financial reporting guidelines, even though it’s operating with a deficit.
At the village council meeting Jan. 27, Joe Laudont – an audit manager at Naperville-based accounting firm Lauterbach & Amen, who worked with Forest Park Finance Director Letitia Olmsted during the process – shared his findings about the village’s finances for the 2024 fiscal year, from May 1, 2023 to April 30, 2024.
“The village has consistently received an unmodified audit opinion,” Olmsted said in an email, “which means that the report is clean, and the financial statements are accurate and comply with financial reporting guidelines.”
Per state statute, the village undergoes an audit every year.
With the audit’s completion, the village files a report with the Illinois State Comptroller’s Office and with other local and federal agencies that require a copy and additional reporting on the village’s finances.
If the village doesn’t comply with the audit, it could be fined, receive a ding on its credit rating, or its state tax disbursements and grant funding could be withheld, Olmsted said.
At the last village council meeting, Laudont communicated three things to commissioners, according to Illinois auditing requirements.
The first is whether there were disagreements between the auditor and village management during the process. Laudont said there weren’t any.
Laudont also shared the village’s management letter and annual financial reports.
The village’s management letter has a new recommendation for deficit net position. The net position evaluates the village’s long-term debt, capital assets, infrastructure improvements and pensions, which aren’t always reflected in its operating budget.
“Make sure that your operating budget is not surpassing what you should be accumulating in your fund balance,” Laudont said to the village council.
Forest Park has long struggled with this. At the end of the 2024 fiscal year, the village had a deficit of about $11 million.
“What the village needs is new revenue, but as a non-home rule municipality, we are limited as to what can be implemented,” Olmsted said. “But the mayor, [Village Administrator] Rachell Entler, and the commissioners continue to communicate with the state to express the challenges that the village faces financially.”
The annual financial reports include an independent auditor’s report, which outlines village management’s and the auditor’s responsibilities, plus the auditor’s opinion about the village’s 2024 fiscal year.
“This is the cleanest and highest form of assurance that we can provide to the village,” Laudont said at the village council meeting.
The financial reports also contain village management’s discussion and analysis of financial activity in the 2024 financial year. A dense section of financial statements is also included.
In the government-wide income statement, “you’ll see the overall change in net position for governmental activities was a positive $3.1 million this year,” Laudont said. Business-type activities ended the year with a positive $4.3 million.
There’s also a statement about the village’s fund balance, which increased $1.2 million.
At the end of his presentation, Laudont mentioned internal policies that the village must follow, including one for police and fire department pension funds. These pensions increased from 2023 to 2024 and remain underfunded.
“As our recommendation, continue to get in touch with your actuary to determine what the best practice is to make sure that gets fully funded,” Laudont told the village council.
There are also internal policies for funds over budget and funds not in compliance with fund balance policy.
Laudont recommended “making sure we’re continuously evaluating the operating budget for that to make sure that we’re in compliance with the fund balance policy that the village holds.”