YOUNGSTOWN — For the third straight year, Youngstown received a clean state audit with no findings for recovery or adjustment.

“A third year in a row with a clean audit is a good indicator of our fiscal responsibility,” city Finance Director Kyle Miasek said.

The latest audit, released Tuesday, is for the year 2023.

“We’ve made huge strides in three years, especially when you consider (American Rescue Plan) funding,” Miasek said. “We’ve been audited, and it’s been shown that we’re spending ARP money correctly. Our books are clean.”

Because of the three straight clean state audits, Youngstown could be eligible next year to move from the high-risk category into low risk with the 2024 audit, according to the state auditor’s office.

“It would be the first time we would be upgraded to low risk in over 30 years,” Miasek said.

Going from high risk to low risk means that the state will test 20% of the city’s major federal funding programs for compliance in future audits rather than 40%, which it has done for numerous years.

The management letter from Julian & Grube Inc., the Westerville accounting firm that did the city’s 2023 audit for the state auditor’s office, includes six noncompliance citations and four recommendations. But most are routine suggestions to improve financial operations and have been included in city audits for several years.

Among the noncompliance citations in the 2023 audit are 12% of the expenditures reviewed were not certified in a timely manner; the need to create a law enforcement trust fund policy; the need for stronger internal controls for credit card use, particularly for the police department; the need to establish stronger procedures to account for all payments made to contractors as part of Ohio Department of Transportation projects; establish formal policies approved by city council for federal programs related to cash management, procurement, determining allowable costs, monitoring and travel costs; and improvements to the city engineering department’s document procedures to verify contractors have not been “debarred, suspended or otherwise excluded” when awarding federally funded contracts.

The city’s 2022 audit included those same six noncompliance citations. One from 2022 wasn’t included this year because the city created a records commission to check vendors listed on the state list for issues.

Miasek said the city this year is working to do the same on the federal level and establishing a law enforcement trust fund.

The four recommendations are establishing an audit committee; having monthly bank reconciliations presented to city council; having a timekeeping process so it can be shown that employees are working 40 hours per week; and a long-time issue regarding ranking police officers receiving accumulated time, which is time off instead of paid time.

The audit said two ranking officers last year either used accumulated time resulting in a negative balance or received approval for it despite having an existing negative balance. The audit said both officers had positive accumulated time balances by Dec. 31, 2023.

The most significant findings in the city’s 2017, 2018, 2019 and 2020 audits 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 had 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.