Syracuse auditors issue unmodified opinion on financial statements but flag material weakness, grant and procurement problems

Bonadio LLP told the Syracuse City Council’s audit committee on March 31 that it would issue an unmodified opinion on the City’s financial statements for the year ended June 30, 2024, but the firm identified a material weakness in internal control and several significant deficiencies affecting grant reporting and procurement.

The audit partner, Greg Evans of Bonadio LLP, said the auditors’ “opinion is, we believe they’re fairly stated in all material respects.” He also told the committee, “we do have that material weakness” after auditors proposed several year-end adjustments that the City accepted.

The audit team said the material weakness largely resulted from multiple audit adjustments recorded after year end. The City’s Commissioner of Finance, Mike Hennessy, told the committee these adjustments amounted to roughly $2 million in under-recorded expenditures, primarily related to workers’ compensation accounting after a change in providers and a $600,000 prepayment that had been recorded as an expense instead of a prepayment.

Bonadio reported approximately 1,100 hours devoted to the audit. The auditors also described operational slowdowns that delayed completion: the Schedule of Expenditures of Federal Awards (CIFA) did not have a final number until Dec. 11, 2024, requiring the auditors to adjust planning and potentially the scope of the single-audit testing.

Fiscal and fund-balance highlights presented to the committee showed Syracuse’s unassigned fund balance rose to about $112 million at June 30, 2024, equal to…