Auditors from CBIZ told the Lawrence Budget and Finance Committee on Sept. 10 that the city’s fiscal 2024 financial statements and the schedule of federal awards each received an unmodified (clean) opinion. Craig Peacock, managing director for the audit team, told councilors the audit found no material weaknesses or significant deficiencies.

"We did not note any major discrepancies whatsoever going through the audit," Peacock said. The auditors also reported timely and well‑supported documentation for bank reconciliations and federal grants; the single‑audit filing was submitted on time.

Committee members used the presentation to probe the city’s fiscal position. The auditors reported a general fund budget deficit of about $38 million in FY24; available funds and strong collections reduced the cash impact. Acting CAFO Ramona Savalos explained how free cash and one‑time federal receipts affected those figures: the city used roughly $38 million of free cash this year, including $20 million transferred to debt service to cover two recently completed school projects and a new police station, $10 million to a stabilization reserve, and about $5 million for site improvements.

Savalos and the auditors said much of the prior year’s unusually large free‑cash balance reflected the timing of American Rescue Plan Act (ARPA) funds. "Those numbers significantly increased the amount of free cash that we had," Savalos told the committee, and that temporary boost explains a large year‑to‑year decline.

The auditors summarized other balance‑sheet items: the city’s unassigned general‑fund balance was reported at about $62.9 million; net OPEB liability was about $315 million (down roughly $34 million from FY23); the retirement system’s net pension liability was $190.7 million and the system was approximately 61.4% funded. Total long‑term debt stood at about $250 million, split roughly $174 million in governmental long‑term debt and $76 million in water and sewer debt.

Councilors expressed concern about long‑term capacity to finance capital projects. One councilor noted that when school‑related debt is excluded the city’s debt service ratio is materially higher and said that could limit the city’s ability to authorize new borrowing in the near term. The audit team offered to prepare a targeted discussion letter on debt trends and suggested the council consider prioritizing capital projects and monitoring market conditions for possible refinancing opportunities.

The committee voted to send the audit as a committee report to the full City Council. Auditors said they would provide a condensed presentation for the council’s meeting so members could review highlights without repeating the committee‑level detail.

Federal awards: the auditors reported approximately $70 million of federal expenditures in FY24 (including ARPA and other grant programs) and issued a clean single‑audit opinion with no questioned costs.

What this means: The FY24 audit reflects no audit findings that require formal corrective action under auditing standards, but committee discussion emphasized fiscal trade‑offs — notably one‑time uses of free cash to fund debt service and reserves and a sustained, multi‑year debt service burden that the council may need to manage through capital planning and budgeting choices.