Norwalk city audit: unmodified opinions; auditors flag segregation-of-duties and procurement lapses

Independent auditors on behalf of CLA delivered an unmodified opinion on Norwalk City’s fiscal 2024 financial statements and issued unmodified opinions on compliance for both federal and state single-audit programs, while also reporting three significant deficiencies and several management recommendations.

The opinion, presented to the Norwalk City ad hoc audit committee, means the auditors determined the financial statements were “presented in accordance with GAAP,” and CLA principal David Flint said an “unmodified opinion is the best opinion that can be received.” Gabriel Epstein, director at CLA, told the committee the firm found three significant deficiencies in internal control related to journal-entry processes and procurement compliance for federal programs; the same journal-entry deficiency appeared on the state report.

Why it matters: an unmodified opinion indicates the city’s financial statements can be relied upon by readers, including bondholders and grantors, but the significant deficiencies are governance matters the city must address to reduce fraud and compliance risk, auditors said.

Audit results and major findings CLA reported unmodified opinions for: the city’s basic financial statements; the schedule of expenditures of federal awards; and the schedule of state financial assistance. On the federal side, total federal awards expended were $39.7 million for the year, down from $52.2 million the prior year; auditors said the decline was driven largely by…