Lake Havasu City audit receives clean opinion; auditors note fund reporting changes

Lake Havasu City accepted its audited annual financial report for the fiscal year ended June 30, 2024, after a presentation by CliftonLarsonAllen LLP that concluded the city’s comprehensive financial report received a clean, unmodified opinion.

The audit presentation Wednesday described several accounting changes required by new standards, including restating prior periods for capital project reporting and moving the city’s flood-control fund into a different reporting category. CliftonLarsonAllen principal auditor Jean Dietrich told the council the audit firm “issued a clean, unmodified opinion” on the annual comprehensive financial report and found no unusual or fraudulent transactions.

The nut graf: The audit confirmed the city remains within statutory and program limits while noting implementation items the finance team has addressed. The firm also completed a single-audit review of federal programs, reporting that three major grant programs together accounted for about $7.6 million of the city’s roughly $9.6 million in federal expenditures for 2024.

Dietrich and city staff described three main accounting changes auditors required: reclassification of a capital project fund to a major fund because of 2024 expenses; creation of a new major fund to increase transparency on a specific project; and moving the flood-control activity out of the irrigation and drainage district rollup and into a business-type reporting category. The audit also identified one internal-control matter that staff corrected during the year: an error recording nonexchange revenues in the Capital Projects Fund.

The auditors reported no findings on internal control over compliance with federal uniform guidance and no questioned costs. Dietrich said the most significant estimate reviewed was the city’s other postemployment benefits liability; the auditors found it consistent with prior periods and identified no management bias in that estimate. The city’s expenditure limit review (a state-related calculation) was in process at the time of the presentation and, as presented, showed the city well below its total expenditure limit.

Council members asked for clarification about the timing of moving the irrigation and drainage district (IDD) / flood-control activity; staff said the IDD had been dissolved in 2023 and that the reclassification took additional year-end work and was completed for the 2024 statements. After questions, Councilmember Koch moved and Councilmember Diaz seconded acceptance of the audited report. The motion carried 6–0.

City Manager Jess Knudson and finance staff were publicly thanked by council members for the work involved in handling the reporting changes and the audit process. The council recorded the formal acceptance vote on the record.

Ending: The auditors said an opinion on the city’s annual expenditure limitation report was expected shortly after the meeting; council members did not schedule additional action beyond accepting the audit report.