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External audit finds clean opinion; one recommendation to formalize receivable and leave calculations
Summary
City auditors delivered an unmodified (clean) opinion on the 2024 financial statements, noted implementation of a new GASB standard for compensated absences, and recommended formalizing procedures for special-assessments receivable and compensated-absences calculations.
Brian Stavengers, partner at the audit firm Bailey, presented the highlights of the city’s 2024 audit and delivered an unmodified opinion on the financial statements. "Unmodified opinions or clean opinions," he said, "which is good. It's what you want when you receive a financial statement audit."
He told the commission auditors reviewed federal programs and compliance and identified one financial-statement finding related to a lack of a formal review over the special-assessments receivable calculation and the new compensated-absences reporting. "Our recommendation is just to formalize that," Brian said, adding that the city had already started formalizing the process. The new Governmental Accounting Standards Board standard on compensated absences (noted in the presentation as GASB 101 implementation) required additional reporting because newer leave types — military, parental and others — expanded what must be accrued.
Brian explained the audit’s scope: standard auditing procedures, additional work where federal funds are spent, and a risk-based examination of accounting estimates (pension, OPEB, landfill closure/post-closure, compensated absences). He said auditors performed additional testing in those areas and noted no federal-aid findings from the single-audit segments reviewed.
The auditors also discussed fund-balance categories and ratios. The presentation showed the city’s general-fund unassigned reserves near 20% of expenditures — below the city’s 25% target — and noted the upcoming land-sale proceeds should improve that ratio.
Commissioners asked about specific topics: the security of developers’ letters of credit for special assessments and how the state’s 3% cap on growth could change reserve planning. Brian and staff described the letters of credit as customary security instruments but declined to opine on the legal sufficiency; they emphasized the increased importance of reserves with state caps.
There was no formal vote on the audit presentation itself; staff made the audit report available on the city website and offered to field follow-up questions from commissioners.
