Mason council receives 2024–25 annual and single audits as drafts amid pending federal guidance

The Mason City Council on Tuesday voted 6–0 to receive the city’s 2024–25 annual financial statements and single-audit materials as drafts after the city’s outside auditors said federal guidance needed to complete the single audit has not yet been issued.

Ali Barnes, principal on the engagement, told council the U.S. Office of Management and Budget had not released the federal compliance supplement auditors rely on to complete testing for federal programs. "Until they produce the final compliance supplement, we are not able to issue your single audit," Barnes said, adding that if the supplement triggers additional testing it could change conclusions but that the auditors "do not expect that's going to happen."

Barnes said the firm expects to issue "an unmodified or clean audit opinion" on the financial statements. She summarized key figures: general fund revenue for the year came in at about $9,000,000 and general fund expenditures at roughly $11,100,000 — an increase driven largely by a $2,700,000 property purchase recorded as capital outlay. Total fund balance was about $4,600,000 with an unassigned balance near $1,600,000.

On long‑term liabilities, Barnes reported a fiduciary net pension position of roughly $17,600,000, a total pension liability of about $23,200,000 and a net pension liability near $5,600,000 (down about $500,000 from the prior year). She said the city’s OPEB (retiree health) assets were about $2,000,000 against estimated liabilities of $1,800,000, producing a net OPEB asset on the order of $200,000 at the snapshot date.

Barnes also noted the city had more than $1,200,000 in federal expenditures this year, triggering the single audit; a single program — described as the congressionally mandated projects program — accounted for roughly $1,170,000 (about 96% of federal expenditures). "We did not have any material weaknesses, significant deficiencies, or material noncompliance," Barnes told the council.

During questions, Councilmember Maher asked what would constitute a "significant change" that would prompt reissuance; Barnes said a "significant" change would be the addition of a finding or a compliance issue identified through additional testing. City Manager (name not specified in the record) told council staff would post and notify the council when a final audit is available and that the council could choose to receive a final copy at a later meeting if any changes occur.

A councilmember moved to receive the 2024–25 annual audit, single audit and related correspondence as drafts, with the final to be received when available; the motion was seconded and approved by voice vote, 6–0. The council packet includes a separate governance letter addressing required communications and references upcoming GASB standards (103 and 104) that staff noted will affect next year’s reporting.