CRA and city auditors issue mostly clean opinions; annual comprehensive financial report includes restatements and internal control findings

Clearwater auditors reported an unmodified (clean) opinion on the Community Redevelopment Agency (CRA) audited financial statements and on the city's Annual Comprehensive Financial Report for the year ended Sept. 30, 2024, while also identifying several control and reporting items trustees and council should note.

Monica Mitchell, assistant finance director, introduced the CRA audit and annual city audit presentations and said the separate CRA audit has been prepared for five years in response to a 2019 statute and that the downtown development board was included in the city's audit this year. Auditor John Brielmeier, partner with Carr, Riggs & Ingram, presented results for both engagements.

Key audit points reported by the auditors included:

- CRA audit: An unmodified opinion (clean) with no findings reported in the management letter for the CRA‑only audit. Auditors noted the North Greenwood CRA is now included in CRA reporting.

- City annual audit (ACFR): An unmodified opinion with an emphasis‑of‑matter paragraph for adoption of a new GASB standard (GASB 100). Auditors reported one material weakness related to the preparation of the Schedule of Expenditures of Federal Awards (SEFA) — two federal awards were presented using obligated or drawn amounts rather than expenditures. Auditors also reported two significant deficiencies in the single‑audit review: deficiencies tied to the Community Development Block Grant (CDBG) reporting and to prevailing wage certified payroll timing for certain projects; the SHIP (State Housing Initiatives Partnership) program was a major program tested as well.

- Restatement: Management removed $1.5 million of HUD revenue tied to an Imagine Clearwater project after discussions with HUD and because environmental review requirements could not be satisfied; that award was not realized and was removed from revenue, reducing previously reported fund balance by $1.5 million (from approximately $66,000,000 to $65,000,000 as presented in the ACFR materials).

- Other adjustments: Reclassification of the Downtown Development Board from a custodial fund to a special revenue fund and a contract‑accounting matter related to the Phillies stadium agreement that resulted in a current‑year impact of about $25,000.

Council and trustees asked questions; no disagreements with management were reported by auditors. Trustees later moved to approve the CRA financial statements and the city's audited financial report by unanimous consent.

The auditors recommended continued attention to SEFA preparation and timely federal reporting; management noted ongoing work to implement inventory and other system improvements.