Auditor: 2019 York City financial reports receive disclaimers; material weaknesses cited

Brian Marchux, a certified public accountant with Brown Plus Accountants and Advisors, told the York City Council committee on March 26 that the firm could not provide an opinion on York City's primary 2019 financial statements and found multiple material weaknesses in federal reporting.

Marchux said auditors issued a disclaimer on the city's main governmental financial statements because "we didn't have enough evidence to support the numbers." He said component units'audits (sewer authority, parking authority and redevelopment authority), which auditors did not perform themselves, produced a qualified opinion because some capital purchases were not capitalized.

The auditor told council the component units represent about 27% of the city's assets and roughly 9% of its revenues. Marchux said that a number of factors made evidence collection difficult, including "key turnover, change in auditors, a change in accounting system," and problems finding historical grant agreements and bank reconciliations.

Marchux said auditors issued a material weakness on internal control and compliance because of the quantity of deficiencies found. "Due to the number of deficiencies we had, we had to automatically step it up to material weakness," he said. He named 11 findings overall and summarized the more significant ones: missing grant agreements and support documents; inconsistent or incorrect schedule of federal awards and assistance listing numbers; incorrect employee census data provided to actuaries; untimely or inaccurate monthly reconciliations dating back to early 2019; untimely federal data-collection submissions; and failure to post audited financial statements on the EMMA (Electronic Municipal Market Access) website within the required period.

Marchux described the practical impact: federal filing windows and bond-disclosure protocols require timely submissions, and missing support forced auditors to withhold opinions. He said a single year's audit for a city York's size takes roughly 1,500 auditor hours (closer to 2,000 hours when component units are included).

Council members asked for the report to be posted and made available to residents; staff said the 2019 audit is available on the city's website under Government > York City Finances. Marchux concluded by encouraging improved document retention and routine internal reconciliations, and by urging monthly internal financial statement preparation and review so management and council can monitor cash flows and program spending.

Why this matters: an auditor disclaimer and material weaknesses do not itself change accounts, but they signal to bondholders, grantors and the public that auditors could not obtain sufficient evidence to form an opinion on the city's 2019 financial statements and federal awards compliance. The committee did not take further formal action during the presentation beyond accepting the auditor's overview and directing staff to the posted report.