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Auditors issue clean opinions on Sandy financials but report three control deficiencies, including a recovered payment error
Summary
External auditors reported a clean opinion on the City of Sandy’s financial statements and the Urban Renewal Agency, but disclosed two material weaknesses and a significant deficiency in internal control identified during the single audit; one finding involved an incorrect vendor payment that was recovered.
Colleen Belford, auditor with TKW, told the council the firm issued a “clean opinion” on the city’s comprehensive annual financial statements for the year ended June 30, 2024, and on the Urban Renewal Agency statements. The firm said financial reports were “fairly stated in all material respects.”
The auditors also reported internal control issues discovered during the single audit required because Sandy expends federal funds. Tim Julett, managing partner at TKW, told the council the single audit turned up three findings. Two rose to the level of material weaknesses (debt recognition timing and capitalization of certain capital asset costs that were initially expensed) and one was a significant deficiency tied to a business‑email compromise payment instruction change that resulted in an incorrect vendor payment; the city said that payment was recovered rapidly when the vendor alerted staff.
Tim Julett said the material adjustments affected debt and capital asset reporting and that staff has corrected the financial statements; he also said the city provided a corrective action plan and staff are working with auditors and the state to close the items. Colleen Belford added that the audit was performed under U.S. generally accepted auditing standards and government auditing standards; auditors also noted implementation of GASB Statement 100 had no material effect this year.
City staff said they have added internal controls to reduce fraud risk, including a requirement to independently call an existing vendor contact before changing payment instructions. Tyler (city staff) said he and his accounting specialist added checkboxes and a vendor‑contact verification step to the vendor‑change process and that the city carries cyber insurance that would cover losses if a malicious payment could not be recovered.
Ending: Council accepted the presentation; staff confirmed a corrective‑action plan has been adopted and submitted to state authorities and that staff will bring any outstanding items back to council as required.
