Norfolk auditors report expected clean opinion, council presses on delayed Norfolk Public Schools audit

Sherry Amos, a principal with CliftonLarsonAllen (CLA), told the City Council during a work session that the firm anticipates issuing an unmodified audit opinion for the City of Norfolk, describing it as "a clean opinion or a good opinion." Amos said CLA found no significant deficiencies or material weaknesses in the city's internal controls and emphasized a risk-based audit approach that reviewed management override and revenue recognition as required auditing standards.

The audit presentation also flagged a delay in the audit for Norfolk Public Schools, which Amos said has not yet been issued because the school system has been slow to provide documentation. "The Norfolk Public Schools audit has not been issued yet, due to some delays that we had once again this year with obtaining documentation and, financial statements, timely," Amos said. Council members pressed for clarity about how often the school audit has been late; CLA and staff described turnover in the school finance office and documentation gaps as causes and characterized this as the second recent instance where timely completion was missed.

Council members expressed concern about compliance and possible budgetary or bond consequences. One member noted that the city is currently out of compliance with state requirements related to audit timing; Amos said, "To the best of my knowledge, I don't think there's any major ramifications," but staff warned that some bond covenants require audited financials by year-end and that continued delay could create default risk if deadlines are missed.

Several council members urged concrete follow-up. The mayor asked the city manager and city attorney to draft options, including a resolution to explore shared fiscal-services arrangements so the city could provide accounting support to schools if the school board agreed, and requested that staff return with a proposal early in the year. Another council member recommended scheduling a formal joint meeting with the school board and direct communications with the chair and superintendent to address the issue before the upcoming budget cycle.

CLA also summarized two new accounting standards that affected the city's financial statements: updated guidance on compensated absences and a disclosure-only standard regarding certain risk concentrations. Amos said management had selected accounting policies consistently with prior years and that CLA had no disagreements with management on accounting policies.

The council directed staff to pursue follow-up steps and to report back with options to address the school audit delay and related compliance risks ahead of budget decisions.