External auditor gives Springfield an unmodified opinion for fiscal 2024; fund balance rose

James Bence, engagement partner with Malden and Jenkins CPAs, told the Board of Mayor and Aldermen that the city's financial statements for the year ended June 30, 2024, received an unmodified audit opinion.

Bence said the unmodified opinion indicates the financial statements "are materially correct as presented," and described a number of fiscal highlights, including a strong unassigned general-fund balance and positive cash flows in the city's utility funds.

The auditor summarized trend data showing the city's unassigned general-fund balance represents roughly 85% of annual expenditures and noted the city's reserves grew after earlier federal pandemic-era aid. Bence told the board the city budgeted to use roughly $1.6 million of reserves during the year but instead added about $1.4 million to fund balance; overall expenditures ran about 83% of what had been budgeted. He also said each of the water and sewer funds increased unrestricted net position over the past four years and that utilities generated positive operating cash flows used for capital improvements.

Bence described forthcoming accounting guidance from the Governmental Accounting Standards Board (GASB) that will affect how compensated absences are reported, saying the change will increase the recorded liability for unused leave at year end and that the firm will work with city management on implementation.

City staff and board members praised the auditing firm and the finance staff for the lack of audit findings. One speaker thanked the auditors and the city's financial staff "for not having any findings this year," saying that outcome reflected responsible handling of taxpayer dollars.

No formal board action was taken on the audit presentation at the meeting; the item was presented for review and comment.

The board's discussion was limited to the auditor's presentation and brief acknowledgements from staff and elected officials. The presentation materials referenced several pages of the audit report, including a five-year trend of general-fund balances, budget-to-actual comparisons, and cash-flow information for utility funds.

The auditor invited questions at the end of his presentation; none of the questions altered the content of the report or produced findings requiring board action.

Looking ahead, Bence said the firm will assist the city with implementing the GASB change on compensated absences during the next reporting cycle.