Neosho audit: unmodified opinion, strong reserves; auditor urges cyber and water-loss review

Matt Wallace, partner with KPM CPAs, told the Neosho City Council on the audit presentation night that the city’s 2024 financial statements received an unmodified opinion, the firm’s highest standard of assurance.

"The city did receive an unmodified opinion," Wallace said, adding that this means the financial statements are "presented fairly in accordance with generally accepted accounting principles." He said the general fund’s total revenues were "right at $8,400,000," down about $300,000 from the prior year, and that the general fund ended the year with a fund balance of about $9,900,000.

Wallace highlighted that the city’s cash and investment balances provide "well over a year in operating reserves," a level he called a "very healthy financial position." He also summarized enterprise- fund results, noting the water and sewer fund had operating revenues "right at $6,600,000" and a net income near $1,200,000, leaving a total net position of about $20,300,000.

On federal funding, Wallace said Neosho received nearly $3,000,000 in federal grants in fiscal 2024, which triggered a federal compliance audit; KPM found no compliance findings for the major federal programs tested (State and Local Fiscal Recovery/ARPA and related CDBG funding for Stratford and Freeman projects).

Wallace concluded with routine recommendations for management: continued vigilance on cybersecurity, closer review of the city’s water-loss percentage (the audit recommended a target between 15%–20% and calculated that current loss exceeded that range), and preparation for an upcoming Governmental Accounting Standards Board pronouncement (GASB Statement 101) that could change how accrued leave is reported.

Council members thanked Wallace and city staff for the work. Wallace said he and his team remain available during the year to answer follow-up questions as the city digests the audit materials.