YOUNGSTOWN — The city received its fourth consecutive annual clean state audit with no findings for recovery or adjustment.

“We’re very pleased to get our fourth clean audit,” said city Finance Director Kyle Miasek. “We are in a much better place because of stronger financial controls. The responsibility now is to not change our trajectory. We want to continue with clean audits. We want the community to know the city’s financial integrity is in place, and these audits show that sound financial management is the key to running a healthy city.”

The latest audit, released Tuesday, is for the year 2024.

After its third straight clean audit, released last year for 2023, Youngstown was able to move from the high-risk category into low risk. It was the first time the city moved into low risk in more than 30 years.

Going from high risk to low risk meant the state tested 20% of the city’s major federal funding programs for compliance rather than 40%.

The management letter from Julian & Grube Inc., the Westerville-based accounting firm that did the city’s 2024 audit for the state auditor’s office, included seven noncompliance citations and three recommendations. They are considered routine suggestions to improve financial operations and nearly all of the noncompliance citations have been in city audits for several years.

The noncompliance citations in the 2024 audit are 10% of the expenditures reviewed were not certified in a timely manner; the need to create a law enforcement trust fund policy even though the fund has less than $43,000 in it; the need to establish stronger procedures to account for all payments made to contractors as part of Ohio Department of Transportation and Ohio Water Development Authority projects; adopting a written policy for credit card accounts used by city council and the police department, including a maximum credit card limit; documented procedures need to be in place for the engineering department to verify contractors haven’t been “debarred, suspended or otherwise excluded” when awarding federally funded contracts; recommending the city’s records commission schedule meetings to determine the retention and disposition of city records; and the health department do the same with its records commission.

Miasek said the records commission issue is being addressed by the law department and it will meet twice a year, starting in 2026, so it will be included in the audit of the 2025 year, but be eliminated in the audit of 2026.

ODOT and the OWDA are changing how they provide funding to communities, so that will also not be in the 2026 audit, Miasek said.

Also, the federal government created a website to check contractors because of American Rescue Plan reporting, which the city uses so Miasek said he expects it won’t be included in the next audit.

The 2024 audit also included three recommendations for the city.

One is the same as in 2023: the need for a timekeeping process to ensure everyone is working 40 hours a week.

The two others are providing more detail over financial reporting and carefully watching that the correct overtime is paid to employees.

The report reads: “Certain city employees did not receive the correct overtime pay due to errors in the system used to record certification data,” and “discrepancies were identified in how the system recorded certification details, which led to incorrect overtime rate calculations for various individuals, resulting in underpayment.”

Miasek said the overtime issue was resolved.

In addition to the four straight annual clean audits, the city in June received a major upgrade in its credit rating from Moody’s Ratings, which will help reduce interest rates when it borrows money.

The city increased two levels from the Baa1 rating it had since July 2011 to A2, which means the city has a “strong” ability to repay loans and went from a moderate credit risk to a low one.

“These are the two most important things to happen financially for the city in ’25,” Miasek said. “This is all about going forward and doing what is best for the city.”

The most significant findings in the city’s audits for 2017, 2018, 2019 and 2020 were that Youngstown improperly spent $4,415,332 from its water fund ($2,653,169), wastewater fund ($1,612,163) and environmental sanitation fund ($150,000) primarily for economic development grants to businesses.

Because of $5.3 million the city received in 2020 in federal COVID-19 relief funds — as well as $82,775,370 it was awarded in ARP funds, divided evenly between 2021 and 2022 — it had enough money in its general fund to reimburse the three funds, which council approved April 21, 2021.

Audits since 2004 also objected to how the city had used 70% of the cost of operating numerous departments and agencies from the water and wastewater funds. That issue was resolved in the 2021 audit.