Auditor gives Port Washington "unmodified opinion," flags adjustments and segregation-of-duties

Brian Grunewalda, an auditor with CliftonLarsonAllen (CLA), told the Port Washington Common Council at a council meeting that CLA issued an unmodified opinion on the city’s 2024 basic financial statements and identified two disclosure items: audit adjustments and segregation-of-duties concerns.

The auditor said the unmodified opinion means CLA believes the financial statements are complete and presented in accordance with professional standards. "Essentially means that I believe that your financial statements are complete and accurate and in accordance with our professional standards," Grunewalda said.

The nut graf: The audit found no material misstatements requiring an adverse opinion, but CLA recommended the council and management continue attention to internal control and cash-handling practices at decentralized collection points. That matters because the city’s reserves, investment earnings and budgeting choices depend on accurate accounting and strong internal controls.

CLA told the council the audit identified two communicated findings: "adjustments to the city's financial records" (audit adjustments that were included in the reported statements) and a comment on segregation of duties in accounting functions. Grunewalda said the segregation-of-duties comment stems from a small finance staff and the number of tasks flowing through the same personnel, and he called it a condition the city should continue to be aware of.

The auditor reviewed fund-balance detail and said the city ended the fiscal year with roughly $3,700,000 in total fund balance and an increase of $57,533 from the prior year. Grunewalda noted the city’s unassigned general-fund balance percentage is well above the city policy of 20 percent: "When I look at your actual results ... I would say it's very strong and considered in comparison to your policy," he said, citing recent years in the low- to mid-30 percent range.

CLA also reviewed special revenue and capital projects funds. The auditor noted the capital projects fund balance rose from about $4,000,000 to approximately $7,300,000, which he attributed to the timing of debt issuances and unspent bond proceeds. CLA reported testing of American Rescue Plan Act (ARPA) expenditures for the audited year and said it found no issues for the 2024 audit period.

Council members asked about the longevity of the audit relationship and about cash-handling practices at decentralized points such as Parks & Rec and the marina. Grunewalda said CLA has been auditing the city for roughly five years and that this year's comment arose after the audit team performed additional walkthroughs of other cash-collection points. Melissa, a city staff member, said the city is working to adjust policies for those departments.

Ending: The audit presentation produced no formal council action during the meeting; CLA’s recommendations were presented to guide management and council oversight. Council members indicated staff will follow up on controls and cash-handling policies.