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City's FY2024 audit returns a clean opinion; auditors flag capital-asset reporting weakness
Summary
External auditors gave Falls Church an unmodified (clean) opinion on the fiscal year 2024 financial statements, while the audit letters identified a material weakness in capital-asset adjustments and some internal-control comments; staff described planned corrective steps.
Brown, Edwards & Company presented Falls Church's draft comprehensive annual financial report for the year ending June 30, 2024, and told the council the opinion is unmodified, commonly called a "clean opinion." Audit manager Kristen Holland described the three deliverables in the audit engagement: the ACFAR, the management-letter items related to internal controls, and a governance communication. Holland said the federal-grant opinion is also unmodified and that a small compliance matter related to conflict-of-interest testing was noted.
Councilmember Flynn asked about a material weakness cited for capital-asset adjustments. Holland said the finding did not produce a material misstatement in the financial statements and that governments commonly face complexity in capital-asset schedules. Finance staff said they plan to add another layer of review and to discuss stronger internal controls with the deputy director and the accounting team to reduce errors going forward.
The audit documents and draft management representation letter will be finalized in the coming week; staff said the draft ACFAR is posted on the city's website for public review. Council thanked auditors and staff for a "clean opinion," and there were no changes to the auditor's opinion announced at the meeting.
Next steps: staff will implement additional review steps for capital-asset reporting and bring any required budget adjustments to council if future valuations require actuarially determined contributions or other adjustments.
