Biloxi audit: outside auditor issues unmodified opinion, flags late single-audit filing

An independent audit of the City of Biloxi’s 2023 financial statements received an unmodified (clean) opinion, auditor Kim Marbleich told the City Council during its first meeting of 2025. The audit report also documents a late Single Audit filing; the auditor said the city is now current and the next Single Audit is due June 30, 2025.

The auditor said the report covers two sets of financial statements: government-wide full-accrual statements and fund-level statements used for daily management. “You have received an unmodified opinion,” Kim Marbleich said, noting that the audit report and two accompanying letters (a governance letter and a management letter) were delivered to council members.

The audit highlighted several items the council may want to note. Federal expenditures totaled about $28,700,000 this year, much of it tied to disaster assistance, which triggered a Single Audit. Marbleich said the city had four major federal programs selected for audit this year — ARPA counted as one automatically — because other grant programs required coverage under Office of Management and Budget selection rules.

At the fund level, the auditor reported a $1.9 million decrease in General Fund cash and a $1.4 million decrease in receivables tied to collection of lease receivables. The audit shows the General Fund had a board-committed balance of $1.4 million and that ARPA funds were recorded as unearned revenue and “committed” as of Dec. 31, 2024. In the proprietary Water and Sewer fund, the presentation reflected completion of about $167 million in capital projects, which moved costs from construction-in-progress into depreciable capital assets.

Marbleich also noted accounting changes recorded on the government‑wide statements, including a new liability category related to GASB 96 (subscriptions) and the recognition of net pension liabilities. The city recorded roughly $1.7 million in capital leases in 2023 related to fire truck acquisitions, the auditor said.

Council members pressed about the audit’s timeliness. Marbleich said the delay was driven in part by the city’s trial balance arriving much later than planned (she said the firm had expected it in January but received it in June), and by the workload of fieldwork and follow-up questions. “When we missed that first [target], we have to start working in and around other jobs that we have,” Marbleich told council members.

Marbleich recommended the city provide complete audit information to the auditor by March 1 to meet the June 30, 2025 Single Audit deadline. Council members and staff thanked the audit team and the city controller for their work. The presentation included an accounting management letter with nonmaterial recommendations intended to strengthen processes; Marbleich said none of the comments rose to the level of a significant deficiency or material weakness.

Questions from councilors clarified other details reported in the audit, including that the city’s “miscellaneous” governmental revenue category includes water and sewer administration fees, cemetery lot sales, recoveries and settlements, and similar items. Marbleich also reminded the council that the audit report includes detailed note disclosures, compliance testing results and the Single Audit schedule of federal expenditures.

The council did not take formal action on the audit during the meeting beyond receiving the presentation.