GONZALES — The city of Gonzales’ annual audit was returned with no findings, and the auditor said the city is “in good financial shape.”

Mike Schexnayder, a Gonzales auditor with the accounting firm Postlethwaite & Netterville, told Mayor Barney Arceneaux and the Gonzales City Council on Monday that the city had received a clean audit for the fiscal year that ended in May.

Schexnayder said he had reviewed the city’s finances, internal controls and compliance with state and federal laws and that there were “no instances where you’re not in compliance.”

Gonzales’ city government acts as an effective and efficient “$26 million-a-year business,” he told the mayor and council, adding that Gonzales has “a very healthy fund balance for a budget your size.” The city reported a decrease of more than $4.5 million from its fund balance in 2011-12, Schexnayder said, but still carried a surplus of nearly $13 million.

“You’re in good financial shape,” Schexnayder said.

The audit also reviewed the handling of federal grant money received by the city, an added component to the annual audit. The city received nearly $1 million in federal funding toward construction of its new police headquarters, the city’s major capital expense during the last fiscal year at nearly $4 million.

Because the city received more than $500,000 in federal grant money, Schexnayder had to make sure the city met all federal standards.

“It makes the audit harder, but you’re not gonna turn away the money,” City Clerk and Finance Director Clay Stafford said.

The city also received $995,000 from the U.S. Department of Housing and Urban Development as part of the state’s Community Development Block Grant program.

The police station was part of more than $7.5 million the city spent in capital asset improvements during 2011-12, the audit showed.

“It’s amazing a city this size can spend that much money on improvements and not have to borrow money,” Schexnayder said. “You’re the only one I know.”