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South Ogden reports 'low' fraud risk but flags training, internal-audit gaps
Summary
City finance staff told the council the 2025 fraud-risk assessment scored 355 out of 395, placing South Ogden in a 'low fraud risk' category, but auditors flagged two unmet items: governing-body training and a formal internal-audit function. Staff proposed remedies and next steps.
South Ogden City finance staff told the council on Dec. 16 that the city’s 2025 fraud-risk assessment earned a score of 355 out of 395, placing the city in the "low fraud risk" category, but auditors identified two areas where the city scored zero: required governing-body training and a formal internal-audit function.
The report was presented as an annual audit requirement. "We scored a 355 out of 395, which puts us in the low fraud risk category," the finance presenter said, adding that the two zero-scored items were members not completing the required online training during their term and the absence of a formal internal audit function.
Why it matters: auditors use the assessment to test internal controls such as separation of duties, purchasing-card oversight and cash-receipt procedures. Achieving higher scores can reduce perceived financial risk for bondholders and demonstrate stronger internal controls to state auditors.
Finance staff explained options to address the shortfalls. The city could require all governing-body members to complete the state auditor’s municipal-officials training (documentation now requested by auditors) and could either establish an internal-audit function or hire an outside firm to perform more in-depth testing. "We could hire an outside audit firm to do that as well," the presenter said, describing deeper sampling for cash receipts and other procedures beyond routine audits.
Staff also noted credentials among accounting staff ("Lisa Stout is a CPA, and then myself and Justin Swarinson are both CGFMs") and reminded the council that the city maintains a fraud hotline for reporting concerns. The presenter said she will revisit the training requirement with incoming council members in February and that completing the course would add 20 points to the assessment, moving the city into a "very low" risk band.
No formal action was taken at the work session. Staff said they will provide documentation links and follow up with the council on timelines for training and any decision about engaging outside audit services. The item was presented as an informational briefing required by the auditors and will be on the record again when staff meet with the new council in February.
