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Auditors issue unmodified opinion on 2023 finances, flag journal‑entry material weakness
Summary
External auditors told the council the city—s 2023 financial statements received an unmodified opinion but flagged a material internal‑control weakness tied to journal‑entry timing; they also noted a $42 million net position deficit driven by retiree health liabilities and confirmed no single‑audit findings on ARPA and CDBG.
Greg Evans, partner at the Bonadio Group, told the City Council that the firm had issued an unmodified opinion on the city—s financial statements for the year ended Dec. 31, 2023, meaning the statements are "fairly stated in all material respects," he said. Evans noted the statements show $226 million in capital assets, about $40 million in net pension liabilities and a $42 million net position deficit driven largely by retiree health obligations.
Evans said the general fund—s unassigned balance stood at $8.9 million, roughly 13% of annual expenditures, within the State Comptroller—s 15% guideline. He told council that some large items in the statements are actuarial estimates—pension and retiree health figures change annually based on actuarial assumptions—and that the audit identified a material weakness related to journal entries and timing of grant revenue recognition. "We did note a material weakness ... journal entry," Evans said, and added staff turnover and timing issues contributed; he said he expects the comptroller—s office to address the issue during the current year—s work.
Evans also summarized the single‑audit of federal grants and said the audit of ARPA and Community Development Block Grant (CDBG) funds produced no compliance findings, indicating existing internal controls over those programs were operating as designed. He flagged an upcoming Governmental Accounting Standards Board pronouncement affecting how compensated absences are recorded and urged staff to work with him and the comptroller—s office on implementation.
The presentation closed with council members asking about timing for the Joint Sewage Board audit and whether late partner reports contributed to delayed issuance; Evans said the city had to wait for a late partner report but that the firm felt comfortable with the numbers and the opinion.
Council did not take substantive action on the audit beyond asking staff to follow up on the material‑weakness remedy and on timing improvements for partner audits. The auditor offered to return with additional details on implementation if council required it.
