City auditors give Berkley a clean opinion; one internal-control finding remains

The independent auditors reported a clean (unmodified) opinion on the City of Berkley’s FY2025 financial statements at the council’s Nov. 17 meeting, but they also identified one significant deficiency related to the city’s bank-reconciliation process.

Greg Sowell, partner in charge of the audit engagement, told the council that the auditors concluded the financial statements present fairly in accordance with accounting standards and that the audit engagement concluded six weeks earlier than the previous year. The single-audit for federal expenditures (linked to the HVAC project) remains open because the federal compliance supplement has not yet been finalized.

Justin Comas, audit senior, described the lone significant deficiency: the city’s new policy requires bank reconciliations to be signed and dated after review, but several reconciliations were not dated when auditors tested the control. "Timely bank reconciliations are an important piece of the city's operations," Comas said, and auditors recommended the city follow its policy and date reconciliations upon completion of review.

Finance Director Carl Johnson told the council that management had addressed prior-year findings and that the undated items were a process lapse tied to rolling out the updated policy; he said staff immediately dated the records once the issue was identified. The auditors reported no disagreements with management and noted some immaterial adjustments that did not affect the audit opinion.

The auditors also discussed accounting standard changes (GASB updates) that will affect future reporting and called out sensitive estimates, including net pension liabilities and OPEB, as significant to the financial statements. Council members asked follow-up questions on actuarial uncertainty and controls; the auditors encouraged continued adherence to the revised reconciliation policies.