Presnell Gage gives Moscow unmodified opinion on FY2024 financial report; council accepts audit

Nick Nicholson, an auditor with Presnell Gage, presented the City of Moscow’s FY2024 Annual Comprehensive Financial Report to the city council on March 3, 2025, and reported unmodified (clean) audit opinions and no findings.

Nicholson explained the audit process and said the audit included three standard opinions — fairness of financial statement presentation, internal controls, and compliance over federal awards. He told council the city’s FY2024 report received unmodified opinions and that the single-audit review covered the city’s COVID State and Local Fiscal Recovery Funds (SLFRF), which exceeded the federal threshold and was treated as a major program.

Why it matters: An unmodified audit opinion indicates the auditor found the city’s financial statements fairly presented under generally accepted accounting principles; the result is commonly used by creditors and rating agencies and can affect bond pricing and access to financing.

Nicholson highlighted several financial points from the report. He said the city’s government-wide net position increased by about $13.7 million, driven largely by capitalized projects. He explained the general fund decreased year over year — largely because of transfers to capital projects — and that the city’s general-fund carryover would allow it to operate at last year’s spending rate for "just over 5 months." He described restricted and assigned fund balances and summarized enterprise (utility) fund positions, noting the business-type activities hold most of their net position in capital projects related to water, sewer, stormwater and sanitation.

Council members asked technical questions about audit sampling, materiality and internal controls. Nicholson described the risk-based approach auditors use, confirmation of cash and investments with third parties, and statistical sampling that is expanded if deviations are found. He said auditors evaluate whether exceptions indicate procedural problems or fraud and noted the state and federal funding agencies can require corrective action when weaknesses are identified.

A motion to accept the FY2024 Annual Comprehensive Financial Report as presented was made, seconded and adopted unanimously. Council members verbally registered their votes during the roll call.

“We provide 3 opinions within the main document … our opinions are what we call unmodified opinions … it’s a clean opinion,” Nicholson said during the presentation. He later summarized the city’s liquidity position: “you can basically operate just over 5 months.”