HOUGHTON — The Houghton City Council approved a fund transfer to correct an approximately $15,000 deficit found during the city’s Fiscal Year 2021 audit.

The $15,174 deficit came in the public improvement fund, which is used as a pass-through account for capital projects, particularly when they involve grant funds, said City Manager Eric Waara.

“Any income to the public improvement fund comes from city-supplied funds from other funds (usually for match)” he said. “Sometimes it’s a rental rehab — the owners’ match funds come in there — and grant funds that come back through the fund on a reimbursement basis,” he said. “This makes it easier for us to track a big project internally and makes the auditors’ jobs easier.”

The deficit occurred when reimbursement by the Michigan Economic Development Corp. for a rental rehab project crossed over into a new fiscal year. Two months into the new fiscal year, the city received an invoice for work, which the city paid and submitted to MEDC for reimbursement.

“Part of the work on that invoice occurred in June, which was in the previous fiscal year, and in the crossing of payments, deposits, etc., that portion of the reimbursement… was not booked as a receivable in the previous fiscal year, which then showed the public improvement fund having a deficit at audit,” Waara said.

The city had not needed to prepare a deficit reduction plan since the early 2000s, Waara said.

“Fortunately, this one is only an accounting thing,” he said.

Any fund deficits must be reported to the Michigan Department of Treasury. The city also has to prepare a deficit reduction plan: in this case, a transfer of $15,174 from the general fund.

With the council’s approval Wednesday, the city will send a letter to the treasury department informing it of the transfer. The letter had to be in prior to the next regular council meeting, necessitating Wednesday’s special meeting.