The Fort Atkinson City Council heard the city's 2024 audited financial statements on May 20 from Andrea Janssen, principal at Baker Tilly, who said the firm issued an unmodified (clean) opinion on the city's financial statements but noted an adverse opinion on a discretely presented component unit and a material weakness in the financial-statement close process.

The audit matters matter because the opinion is the highest level of assurance an auditor provides and the material weakness is a required disclosure that reflects the current capacity to prepare year-end financial reporting. Janssen told the council the adverse opinion relates to the Fort Atkinson Historical Society "because they are not audited, we can't pull those numbers into here." She also said: "we issued an unmodified opinion, otherwise known as a clean opinion."

Janssen summarized key figures from the statements: nonspendable fund balance of about $2,800,000 (largely advances to TIF districts and land held for resale of roughly $870,000), an assigned balance near $1,200,000, and an unassigned general-fund balance of about $6,100,000, for a total fund balance of roughly $10,100,000 at year-end. She said the 2024 net income was about $2,600,000 compared with a final budget that anticipated a net loss of about $289,000. "Those are your reserves," Janssen said of the unassigned balance.

On internal controls, Janssen said the audit report included "a material weakness over financial statement close process, including the financial reporting." She explained this is common for municipalities of the city's size because auditors prepare certain year-end journal entries. The report lists material journal entries (page 23 of the audit), which Janssen characterized as year-end reporting adjustments rather than problems with day-to-day operations.

Janssen also reviewed debt and utility results. She said the city's calculation tied to the state statutory limit and the council's policy limit placed legal debt at about $42,600,000 at the end of 2024 and that the city was within statutory and policy limits. On utilities, she reported strong operating results for the water utility (operating income of about $1,500,000 and roughly seven months of cash reserves) and healthy reserves for sewer and stormwater funds after recent capital work.

No formal council action was taken on the audit at the meeting; the presentation was informational and council members thanked staff for preparing the financials. Janssen invited questions and said she was "happy to answer any questions."