Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance Audit Interfund Loans topic
No spam. Unsubscribe anytime.
Ogden auditors report clean opinion but flag state compliance items, urge council to resolve long-standing interfund loans
Summary
External auditors gave Ogden City an unmodified opinion on its 2023–24 financial statements while identifying two state-compliance findings and recommending council action on interfund loans that exceed 10-year terms for redevelopment areas (RDAs). City staff said they will bring updated promissory notes and proposed write-offs to council.
An external auditor told the Ogden City Council during a Feb. 18 work session that the city’s 2023–24 financial statements received an unmodified (clean) opinion but included two state-compliance findings and several items needing council direction.
The finding the auditor highlighted was that the city’s general fund unassigned fund balance exceeded the state-prescribed 35% threshold. "We had not unmodified or clean opinion on the financial statements of the city," the auditor said, and later explained that an unexpected mark-to-market gain on longer-term investments pushed the unassigned balance above 35% after the fiscal year ended.
Why it matters: exceeding the state threshold requires disclosure to the state and, the auditor said, better month-to-month monitoring of investment fair-market-value adjustments and more timely year‑end budget amendments so the city can encumber or transfer excess funds before fiscal closing.
The audit also identified budget monitoring gaps in smaller funds: the auditor said the “Morgan scribe force fund” went over budget by about $54,000 because revenue (a grant) was recorded but no budget amendment followed. The auditor recommended more frequent tracking and, where appropriate, monthly recording of fair-market adjustments on investments rather than annual recording.
Interfund loans and RDAs: auditors and staff told council the more policy-sensitive item is long-running interfund loans. State code requires that loans between funds not exceed 10 years, the auditor said, and many of Ogden’s existing promissory notes are beyond their original terms. He said that when repayment beyond 10 years is unlikely, accounting standards would support forgiving the loan (converting it to a transfer), but RDAs complicate that approach because RDA revenues may not materialize for many years.
City finance staff said administration will bring updated promissory notes and resolutions to council. Staff said administration will recommend writing off a $500,000 general-fund-to-CBD RDA loan and will update amortization schedules and promissory notes for other RDA-related loans so expiration dates align with RDA timelines. On smaller or enterprise-related notes — including a $57,000 promissory note tied to airport equipment — staff sought council direction on whether to extend, write off or continue collection.
Fiscal highlights and context: staff reported an overall fund-balance increase of about $5.5 million for the year and said unassigned fund balance rose by roughly $2.2 million; finance staff noted that 10 years ago the city’s fund balance was under $12 million and is now about $74 million (a portion of which is ARPA restricted funds). The report also listed capital investment of about $61.4 million in FY24 and newly issued bonded debt tied to the WonderBlock development of about $127.2 million (split across RDA and MBA accounts). RDA fund balances rose sharply — staff said one RDA fund increased by roughly $65 million, driven largely by WonderBlock bond proceeds.
Airport and enterprise funds: staff and an attendee discussed airport operations. One staff speaker reported an operating loss of $81,000 for the year (another speaker noted a figure of about $65,000 in the same exchange). Staff said airport cash and golf cash balances ended FY24 positive but that transfers and capital receipts inflated those balances; they will decline as projects spend down funds.
Next steps: staff told council they will present specific promissory-note updates and resolutions to clear expired notes or adjust repayment schedules. The auditor also flagged two forthcoming GASB reporting changes that will affect presentation (not accounting) in FY26 financial statements and advised continued attention to compliance testing and budget monitoring.
Ending: council members asked for historical origination and expiration dates for notes and indicated they expect administration to return with recommended resolutions on write-offs and updated promissory notes.
