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Council accepts city audit showing clean opinion; auditors note past capitalization and lease review timing issues
Summary
External auditors issued an unmodified opinion on the city’s comprehensive annual financial report; the auditor flagged a deficiency related to delayed capitalization of capital projects and delayed review of leases/subscription IT contracts, and one single‑audit finding on ARPA retainage that was corrected.
The Amarillo City Council accepted the city’s Comprehensive Annual Financial Report after external auditors issued an unmodified (clean) opinion, while noting a handful of non‑material internal control matters that staff is addressing.
Finance staff member Laura Storrs and Janie Arnold of CMMS CPAs and Advisors briefed council on the 300‑page audited financial statements and accompanying single audit. Storrs said the city prepares financials under generally accepted accounting principles (GAAP) and GASB standards and that Amarillo has received the Government Finance Officers Association award for financial reporting in prior years. The external auditors provided a clean opinion on the financial statements.
The auditors’ required‑communication letter and single audit identified a deficiency related to delayed capitalization of certain capital improvement projects and delays in reviewing leases and subscription‑based information technology contracts. Storrs told council the issues were influenced by recent implementation of new financial software and turnover in senior finance staff; she explained actions under way, including more regular meetings with project managers to ensure timely capitalization and consideration of an additional staff position or third‑party assistance to address complex lease accounting.
Auditors also reported one single‑audit finding related to an ARPA (American Rescue Plan Act) item involving retainage payable reported on a grant report; staff corrected the reporting in the subsequent quarter. Storrs said the auditors found no material weaknesses; the single‑audit compliance opinion was unmodified. Total federal and state grant expenditures for the period were about $53.8 million, Storrs said.
Council members asked questions about standard audit language referencing fraud risks and the length of the city’s relationship with its audit firm; Storrs and Arnold explained that auditors include language about inherent fraud risks in every audit and that the current firm (CMMS, part of Atlas Advisors) has performed the city’s audits in recent years amid some firm consolidations.
Council moved to accept the audit; the motion passed on a voice vote.
