Independent auditors issue clean opinion on Kingman’s FY24 financial report

Forbus Mazars LLP presented its fiscal year 2024 audit to the Kingman City Council and issued an unmodified, or "clean," opinion on the city's annual comprehensive financial report, the auditors said.

The audit partner, Rachel Ormsby, told the council the firm completed the city's financial statement audit, a single audit because federal grants exceeded the $750,000 threshold, a report on the annual expenditure limitation, highway user revenue compliance and an examination of court records. "We did issue an unmodified or clean opinion, which is the best of the best," Ormsby said.

The audit manager, Tiffany McCalvo, told the council the work found no proposed audit adjustments and no material weaknesses or significant deficiencies in internal control. "We did not determine that there were any significant segregation of duties conflicts or findings with respect to internal controls," McCalvo said. She noted auditors recorded certain beginning-of-year entries (pension and OPEB balances and conversions from modified to full accrual) that were part of services the firm performed at engagement start.

Why it matters: a clean opinion is the highest level of assurance auditors can provide and supports the city’s year-round financial reporting and budgeting. The auditors highlighted management’s disclosures about estimates used in the financial statements, including allowances for doubtful accounts, pension and OPEB liabilities and lease-related estimates.

Context and notable items: auditors pointed to a one-time operating grant and settlement that affected business-type activity results in FY23 — an approximately $53,000,000 remediation settlement tied to airport remediation — and said the related FY24 activity included carryforward expenditures but not the large FY23 influx of grant revenue. Ormsby also said the FY24 report was issued earlier than the prior year, crediting city finance staff for cooperation.

Council questions focused on terms and acronyms; when asked to explain OPEB, Ormsby replied OPEB stands for "other post-employment benefits," commonly retiree health insurance, and said actuaries supply many of the inputs used in the disclosures.

The auditors encouraged council members and residents to read the management’s discussion and analysis section in the ACFR for a concise overview of the year’s financial trends. No formal action was required of the council at the presentation.

Ending: Council members thanked the audit team and city finance staff for the timely completion of the audit.