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Independent auditors give city an unmodified opinion; general fund reserves increased
Summary
CliftonLarsonAllen delivered a clean (unmodified) audit opinion for the city’s 2023 financial statements and reported an increase in the city’s unassigned general fund balance and solid benchmarking on statutory debt capacity.
CliftonLarsonAllen principal Brian Gruenewald presented the city’s annual comprehensive financial report (ACFR) to the council on Aug. 13 and reported an unmodified (clean) audit opinion for the reviewed statements, one audit adjustment proposed and one finding referenced for internal control matters.
Gruenewald said the report includes three auditor reports: the audit opinion (an unmodified opinion starting on page 10), communications about internal control and any findings, and a compliance report for federal and state aid testing. He told the council the audit found no compliance issues with the federal/state programs tested, including ARPA-related expenditures, and that the city has earned the Government Finance Officers Association certificate of achievement for excellence in financial reporting for the 30th consecutive year (for the 2023 statements; 2024 statements are submitted for review).
On fund balances, Gruenewald noted the city’s unassigned general fund balance rose from about $6.5 million to $11.5 million through 2024 and represented over 30% of expenditures at year-end, which he described as “very strong” from a benchmarking perspective. He also described statutory general-obligation debt limits: the equalized value-driven statutory limit increased (approximate figures provided on the slide) and the city’s use of its debt limit declined from about 52% in 2020 to roughly 43.7% at the end of 2024.
Gruenewald said auditors implemented Governmental Accounting Standards Board (GASB) updates, including GASB statement 101 related to compensated absences, and that additional GASB standards will need implementation in coming years. He reiterated that audit adjustments and the one finding are disclosed in the financial statements and that staff have worked cooperatively through the audit process.
There were brief council questions about whether audit results influence bond ratings. Gruenewald said rating agencies (S&P) review financial statements during rating calls and examine components demonstrating financial soundness. There was no council action required; the presentation was informational.
