Audit committee finds reporting error but gives city a clean audit opinion; council accepts 2024 ACFR

The Boulder Audit Committee and external auditors issued a clean opinion on the City of Boulder’s 2024 Annual Comprehensive Financial Report (ACFR), but they also reported a material weakness in the city’s grant reporting process related to classification on the Schedule of Expenditures of Federal Awards (SEFA).

Audit committee member David (Dave) Gross, a teaching professor of finance at CU Boulder and an outside financial expert for the committee, told council the auditors from CliftonLarsonAllen gave the city an unqualified opinion on the financial statements, meaning the statements “present fairly and in all material respects” the city’s financial position. Gross said the audit team did identify a material weakness that produced a reporting — not recording — error: certain grants administered by the city for the Boulder County Small Business Development Center were federal in origin but were reported as state grants on the SEFA.

What the city found and the effect: Of about $22 million in federal grants, Gross said roughly $1 million was omitted from the SEFA because of the misclassification. That error affected the SEFA filing only and did not require restatement of the financial statements themselves. Gross said staff has centralized grant reporting to reduce the risk of recurrence and the audit committee and auditors were satisfied with the planned corrective actions.

Council action: The ACFR and the audit committee’s recommendation were included on the consent agenda. Council voted to accept the audit and the ACFR as part of the consent agenda.

Why it matters: A clean audit opinion is a key assurance for bond investors, lenders and the public; the identified material weakness is process‑related and limited to the SEFA filing, but staff and the audit committee acknowledged it deserves corrective action to ensure federal award reporting is complete and accurate in the future.