Auditors give Roseburg an unmodified opinion; city wins GFOA reporting awards

The City of Roseburg's independent auditors told the City Council on Feb. 24 that the city's 2023 annual comprehensive financial report received an unmodified opinion and that the city earned the Government Finance Officers Association's certificate of achievement for excellence in financial reporting.

Auditor Jeff Cooley of Neuner Davidson and Company told councilors the firm's report is "unmodified," a term he said is commonly called a "clean audit," and that there were no material misstatements or reportable findings in the audit files. "There is no findings, no material misstatements, no concerns for the city council to be concerned about as far as the financial statements being free of material misstatement," Cooley said.

Why this matters: an unmodified opinion means the auditor believes the financial statements are presented fairly in all material respects, which helps the city show transparency and reliability to bond market participants, grantmakers and residents. Finance staff also noted that the city received the GFOA certificate for its annual comprehensive financial report (ACFR) and a separate GFOA award for its Popular Annual Financial Report (PAFR), marking long consecutive award streaks.

What auditors and staff told council: Cooley summarized the audit structure and called out two large balance items that appear on the statements: the city's capitalized fixed assets (buildings, equipment) and the accounting measurement of the state Public Employees Retirement System (PERS) liability. He described the PERS-related figure as a large pension liability driven by legacy tier-1 benefits and said the high rates the city is seeing are expected to persist until the mix of retirees changes. Cooley also described the single-audit procedures tied to federal awards, noting the city had material federal grant spend in recent years (for CARES Act and related programs) and that the single audit for those programs produced an unmodified opinion as well.

Finance staff emphasized that the GFOA award requires extensive disclosures and that achieving the award is demanding: staff said the ACFR checklist the GFOA uses runs many pages and includes thresholds that can disqualify a report if items are missing. Finance staff also told council that the city's comprehensive statements show a positive change in net position for the year and a multi-year pattern of maintaining fund balances.

Council questions and follow-up: Councilors asked clarifying questions about the audit report sections (management's discussion and analysis, fund statements, and notes), the size and drivers of the PERS liability, and whether a single large FAA grant would trigger future single-audit coverage. Cooley and finance staff responded that a $2 million FAA grant would likely fall within single-audit thresholds and thus would be part of future federal compliance testing.

Ending: Council accepted the presentation and heard staff say the written audit and the PAFR will remain available for council and public review. Staff and the auditor offered to bring additional detail at future meetings on pension liability disclosures and the single-audit schedule if councilors want further analysis.