Warrensburg receives clean fiscal‑year 2024 audit; auditors flag two material weaknesses

The City of Warrensburg received an unmodified, or "clean," audit opinion for the fiscal year ended Sept. 30, 2024, auditors told the Warrensburg City Council during the council's May meeting.

"In our opinion, the financial statements referred to above present fairly in all material respects," Wayland Mueller, manager with KPM CPAs and Advisors, said as he summarized the independent auditors' report to the council.

Mueller said the audit showed an increase in overall revenues for governmental funds, with $18,279,310 in tax revenue in 2024 and a net increase of nearly $1.3 million across governmental funds. The general fund ending fund balance was reported at $11,205,000, with $8,487,000 of that amount described as unrestricted. In the sewer (proprietary) fund, operating revenues were about $6.1 million and operating income was $2,657,065; the fund's net income for the year was $1,992,117 with an ending net position of about $21.6 million.

The audit identified two material weaknesses tied to internal controls. "Segregation of duties" was highlighted as a common issue, the auditor said, and the audit found bank reconciliations were not completed in a timely manner during the year ending Sept. 30, 2024. Mueller said the city had taken steps to address the reconciliation issue and he expects the finding could be resolved for future audits with more stability in finance roles.

Mueller also reviewed nonbinding recommendations in a separate letter to the council. He urged the city to strengthen cybersecurity controls related to electronic payments and bank relationships, and to ensure staff familiarity with the Uniform Grant Guidance and other federal program compliance requirements for entities that receive significant federal funds. Mueller warned that upcoming Governmental Accounting Standards Board pronouncements could increase recorded liabilities for compensated absences and add disclosures on revenue/expenditure concentration risks.

Council members asked for clarification about depreciation and accounting pronouncements; Mueller explained that depreciation (about $1.6 million in the proprietary funds) is a noncash expense intended to reflect infrastructure renewal needs and that the new disclosures will require judgment about what constitutes a significant concentration of revenue for a fund.

The presentation was informational; no formal council action was taken during the meeting on the audit report.

The city staff and auditors were credited for their work preparing the financial statements and addressing prior reconciliation issues.

The auditors fielded council questions and said they will continue working with city management on implementing recommendations and on interpreting forthcoming accounting standards.