Newport News's external auditors reported an unmodified opinion on the city's FY2025 financial statements during the council's year-end work session, a result the audit team described as the best opinion available.

"The audit resulted in an unmodified opinion confirming that the financial report fairly presents the city's financial position in accordance with generally accepted accounting principles," City Manager Alan Archer told council when introducing the auditors. Audit team speaker identified in the transcript said the team had "an unmodified opinion" for the year ending 06/30/2025 and that there were "no areas of noncompliance or anything to report" in the financial-statement work.

The auditors said they identified one item during the year that met the threshold for a material weakness but added the city had identified and properly corrected the item during the year and the condition did not affect the unmodified opinion. The auditor described material weaknesses and significant deficiencies as control issues that could, if unaddressed, lead to material misstatements; the auditor noted that the material weakness was addressed by management before the issuance of the report.

The audit presentation also covered ancillary engagements: the audit firm reported no deviations in the Virginia Retirement System census review, no exceptions in agreed-upon procedures for the sheriff, and no inappropriate accounting policies. The auditors said federal-program compliance testing is ongoing and a separate report on federal programs will be issued later.

The audit team discussed recent GASB implementations that affected reporting: GASB 101 (compensated absences) required a retrospective restatement of beginning balances, while GASB 102 had no effect on the financial statements, according to the presentation. Audit staff also reported reviewing related-party transactions, accounting estimates and disclosures and found nothing unusual outside of the single corrected material weakness.

The audit presentation closed with a reminder about auditor independence and a disclosure that the firm provided one nonattest service: assistance with preparation and submission of the single-audit data-collection form, for which management accepts responsibility. The auditors said there were no disagreements with management, no consultations with other auditors that they were aware of, no fraud or violations of laws noted, and no substantial doubt about the city's ability to continue as a going concern.

The audit slide deck and the auditor contact information were provided to council; the auditor said staff were available to answer follow-up questions.