Auditor gives clean opinion; council and public press for clearer property-tax and urban-renewal accounting

Ryan Pasparilla, an auditor with REDW, told the Dundee City Council the city’s 2023–24 audit received a clean opinion and that the report reflects cash-basis financial statements covering the fiscal year ending June 30, 2024.

A member of the public raised several questions about how the county allocates property-tax receipts and whether urban renewal (tax increment) receipts were correctly assigned. The commenter said his review showed about a $1,900 discrepancy and that a Yamhill County official told him the county remitted $295,217.41 for urban-renewal taxes while the audit report lists a different amount. He also flagged repeated $75,000 annual transfers from the urban-renewal fund to the general fund labeled as administrative reimbursements and asked whether those transfers were properly justified or being used for non-urban-renewal purposes.

Pasparilla said differences can arise because the city reports on a modified cash basis while county allocations and accrual-type records can look different. He described the audit approach as risk-based, noting auditors sample recorded revenues and verify payments, and that small differences (for example, the roughly $1,900 figure cited) are unlikely to be material to the city’s multi‑million-dollar budget. He also confirmed the audit team reviews loan agreements, transfers and footnote disclosures, and said the auditor would follow up on any specific concerns the council identified so they can adjust audit procedures if needed.

On internal controls and the budget process, Pasparilla said last year’s audit reported a material weakness related to budgeting — including classification errors, missing budget message language and expenditures spent in excess of appropriations — and that the finding continued into the current audit. He said the city will prepare a corrective action plan for the state auditor’s office explaining how it will address those issues.

Pasparilla outlined operating conditions for several funds: the city’s unassigned general-fund cash balance was about $261,000 at year-end (about 13% of annual expenditures), below a commonly-cited benchmark of roughly 30% for fiscal stability. He also described differences among enterprise funds: the sewer fund’s operating revenues largely covered expenses with little reserve buildup while the water fund showed stronger operating income and no outstanding debt, leaving funds for capital needs.

Council members and staff discussed whether the audit should examine particular items more closely. Pasparilla said the auditors use a materiality threshold and are willing to dig deeper on areas the council flags at the audit’s planning stage. He recommended an entrance conference and said staff would receive a list of required workpapers and target dates for the next audit.