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Marion audit: unmodified opinion for FY2024; two material weaknesses noted
Summary
Hogan Hansen issued an unmodified opinion on Marion's financial statements for the year ended June 30, 2024, while identifying two material weaknesses related to segregation of duties and financial statement preparation; city staff said the firm will finish one weakness for the year and the city will change auditors next year.
Jennifer Decker of Hogan Hansen presented Marion's annual audit to the City Council during the March 4 work session, saying the firm issued an unmodified opinion for the year ended June 30, 2024.
Decker told the council the city's governmental fund balances rose by about $26.6 million and that the general fund had a fund balance of approximately $19.6 million. She said total revenues for the year were about $92.7 million, including $34.9 million from property tax and tax-increment financing and $7.2 million in local-option sales tax; charges for services were listed at $16.3 million and unrestricted investment earnings at about $5.0 million.
The audit report shows governmental operating expenses of about $55.8 million, with public safety at about $18.0 million, culture and recreation $8.6 million and public works $7.0 million; business-type activities had expenses of roughly $11.4 million. The audit also includes component-unit data for the Marion Water Department, Friends of the Marion Library, Marion Public Library Foundation, Marion Parks and Rec Foundation and Marion Firefighters Association.
Decker said Hogan Hansen identified two material weaknesses in internal control: segregation of duties and financial-statement preparation (the report cites pages 77'78 for internal-control findings). She noted those issues are similar to prior years and said staff and the firm expect to resolve at least one of the findings for the year ended June 30, 2024.
Decker also summarized statutory reporting items listed in the audit (pages 78'79) and said auditors found no expenditures exceeding the certified budget, no inappropriate travel or related-party transactions, and no reportable noncompliance with deposit and investment provisions of chapters 12B and 12C of the Code of Iowa. She added that the city filed its annual urban renewal report and annual financial report by the State Auditor's deadlines and told residents the full audit is available from the finance department or the Iowa State Auditor's website.
Leanne, a city staff member who introduced the presentation, told council members that Marion will change auditing firms next year; Bergen KDB will perform the audit for the following fiscal year, while Hogan Hansen will continue providing financial-preparation and audit-readiness assistance for the immediate transition.
The presentation concluded with Decker inviting questions and offering continued availability to staff by phone or email for follow-up.
