City audit finds no material misstatements; auditors issue unmodified opinion

Colby Jensen, an audit director with Forvis Mazars, told the Bellevue City Council on April 15 that the firm issued a clean, unmodified opinion on the city's financial statements for the fiscal year ending Sept. 30, 2024.

The opinion covers the city's financial statements and included additional opinions on internal control over financial reporting and on compliance for major federal award programs. Jensen said, "we've issued a clean or unmodified opinion stating that the city's financial statements are free from material misstatement." He added that the firm found no material noncompliance in its testing of federal award programs that met the single-audit threshold of $750,000.

The audit director described the audit as a multistage effort that included fall planning and two weeks of on-site fieldwork in January, followed by continued work through March. Jensen said auditors proposed certain year-end adjustments and recommended periodic updates to policies and procedures, particularly for electronic banking and controls, to reflect changing practices.

Rich Severson, the city's finance director, thanked the auditors and finance staff and said the financial statements are posted on the city's website. He noted the audit supports the city's bond rating discussions with S&P and that the result reflects the finance department's work.

Jensen also discussed fraud risk and detection. He said the financial-statement audit is not designed to detect all fraud and recommended a reporting hotline as a primary method for tips. He told the council, "there were no items that came to our attention that appeared to be fraud related or misappropriation of city assets." The audit committee will review proposed adjustments and other recommendations in detail.

The audit report and the required communications letter are available on the city's website, and the city said it will consider the auditors' suggested improvements during the coming year.