Auditors give City of Wausau a clean opinion; GASB 101 adjustment and single-audit changes noted

External auditors CliftonLarsonAllen (CLA) presented the City of Wausau’s 2024 financial audit at the Oct. 14 Finance Committee meeting and issued an unmodified opinion on both the city’s financial statements and its federal/state awards. CLA reported one material weakness tied to adjustments for GASB Statement No. 101 (compensated absences) and one significant deficiency related to documentation of suspension and debarment checks on federal grant vendors.

CLA’s John Trautman (principal) and Stuart Randall (audit manager) described the scope of the audit and the resulting opinions. The auditors said the city’s financial statements are free from material misstatement and that federal- and state-award testing did not produce material issues. The report included a management letter with recommendations on year-end close procedures and controls to address staffing turnover and documentation practices.

Key numbers and audit findings: - Opinion: Unmodified (clean) audit opinion on the city’s financial statements and an unmodified report on federal and state awards. - Material weakness: Adjustments to the city’s beginning balances required under GASB Statement No. 101 (compensated absences), resulting in a material adjustment and a finding in the audit report. - Significant deficiency: Documentation and internal-control steps for suspension/debarment checks on some federal-grant vendors; auditors said there was no evidence vendors used were debarred, but recordkeeping needed improvement and the city is addressing it. - Management letter recommendations: strengthen year-end close procedures, document controls to address turnover, and prepare for upcoming single-audit changes.

Financial context provided in the presentation: CLA summarized five-year trends in government and enterprise funds. Highlights included the city’s growth in governmental fund balances (roughly $5 million added over five years) and a general-fund unassigned balance shown around $14.4 million at year end 2024 — above the city’s stated minimum threshold (~$7 million) and in compliance with policy. CLA also described a large increase in the water enterprise net position in 2024 driven by one-time capital funding: roughly $11.8 million increase with about $8 million from grant and principal forgiveness related to water-treatment capital projects and meters.

Federal funding and ARPA: CLA noted federal reporting and administrative changes coming in 2025 and 2026 — including a single-audit threshold increase (from $750,000 to $1,000,000) and other reporting changes. CLA reminded the committee that the city had about $4.5 million in unspent American Rescue Plan Act (ARPA) funds at the end of 2024 and that those funds must be obligated and spent by specified federal deadlines; staff said about $1.8 million remained for city use as of the committee discussion.

Committee discussion and next steps: Finance members discussed TID closings that helped the general fund balances and noted continuing the contract with CLA during an ERP implementation. Staff said a Request for Proposals (RFP) for audit services will be issued as part of normal procurement; finance staff will follow up on the management-letter recommendations and single-audit preparations.