Provo auditors give clean opinion as city reports $24.5 million unassigned fund balance

Provo City officials presented the city's Annual Comprehensive Financial Report and heard an independent auditor's clean opinion Tuesday.

Finance Director John Borget told the Municipal Council the report shows an unassigned general-fund balance of roughly $24.5 million and a net increase in fund balance of about $2.2 million for fiscal 2024. Borget said assigned carryovers were reduced by approximately $2 million and that the unassigned balance rose by roughly $3.5 million compared with the prior year, calling the results the product of "good fiscal management" and conservative choices by staff.

"That unassigned balance is the money available for future operating needs," Borget said, urging continued review of the full 47-page report and telling councilors the city will submit the report to the state auditor as required.

HBMB auditor Jeff Miles read the firm's opinion for the council, saying, "In our opinion, the accompanying financial statements present fairly in all material respects the respective financial position" of Provo City as of June 30, 2024. Miles said HBMB identified no state-compliance findings and no internal-control material weaknesses and that the firm will issue a separate compliance packet and complete federal single-audit work related to remaining ARPA funds.

Borget walked councilors through several highlights: modest overall tax-revenue growth (he reported about $1.5 million in additional tax revenue driven mainly by collections), steady sales-tax receipts following pandemic-era spikes, a disaster-recovery fund balance of about $1.8 million, and a legal-debt margin that leaves substantial borrowing capacity (he reported general-obligation debt of roughly $80 million against a theoretical limit of approximately $641 million).

Councilors asked whether restricted disaster-recovery funds affect bonding. Borget said the restricted nature of those funds shows up in the restricted category of the balance sheet and generally presents positively to underwriters because it demonstrates available reserves, though he emphasized the city cannot spend that money except in an emergency. Miles noted the audit committee's role and commended the city's finance staff for reducing proposed audit adjustments year over year.

The presentation concluded with the auditor's remark that the financial statements present fairly in all material respects. Councilors thanked staff for the report and said they would review the full document online.

The council took no formal action on the report itself at the meeting; the ACFR will be filed with the state auditor as required.