Auditors give Mexico an unmodified opinion on fiscal 2024 financial statements

Amanda Schultz, an auditor with Williams Keepers, told the Mexico City Council on Feb. 10 that Williams Keepers issued an unmodified opinion on the city's financial statements for the fiscal year ended Sept. 30, 2024, meaning the statements are presented fairly in accordance with generally accepted accounting principles.

The audit presentation covered the financial section of the city's Annual Comprehensive Financial Report, or ACFR, and related auditor communications. Schultz said the firm issued two ("you could probably say three") reports in accordance with generally accepted auditing standards. Although the city had federal award expenditures above the $750,000 single-audit threshold, auditors performed an alternative compliance examination focused on ARPA/CSLFRF funding rather than a full single audit; the examination disclosed no matters required to be reported to the U.S. Treasury.

Kristen Brown, who split the presentation with Schultz, summarized the government-wide and fund financial statements. She said total assets and deferred outflows increased by about $2,700,000 (about 3%) compared with the prior year, mainly from increases in cash and capital assets, while liabilities and deferred inflows decreased roughly $1,900,000 (about 14%) largely because of reductions in accounts payable and certain debt balances. Brown reported that total revenues rose about $693,000 (4%) and total expenses rose roughly $1,000,000 (8%).

The auditors noted that the ACFR includes management's discussion and analysis (pages 4—17 of the ACFR) and that the financial section was the focus of the audit. Schultz said the city expects to receive the Government Finance Officers Association certificate of achievement for the 2024 ACFR; the city has received the certificate for 30 consecutive years and expects the 2024 report to meet the program's qualifications.

Schultz and Brown walked the council through footnotes and new accounting guidance. Brown said note 16, "adjustments," reflects a required change under a new accounting standard that reclassified a previously nonmajor fund as a major fund for 2024. The auditors also flagged upcoming GASB guidance the city will evaluate for fiscal 2025 and listed the significant accounting estimates used in the financial statements: allowance for uncollectible receivables, useful lives of capital assets, landfill post-closure liabilities, and net pension asset and related deferred inflows/outflows for the logger's pension plan.

The auditors' communication letter, Schultz said, identified management override of controls and revenue recognition as audit risks to consider; it reported no significant difficulties or disagreements with management and no uncorrected misstatements. The auditors also said they did not identify any internal-control deficiencies rising to the level of a material weakness. Councilmembers thanked the finance staff for preparing the ACFR and noted the long-standing relationship with Williams Keepers.

Less critical details: the audit work included interim fieldwork and a final week of fieldwork in November; Mercedes Kendall served as the supervisor in charge for Williams Keepers on this engagement.