Davenport City officials heard from contracted auditors that the city received a clean, unmodified opinion on its FY2025 financial statements and on the federal-award programs the auditors tested. CFO Basha Gerlach thanked auditors and city finance staff for their work and introduced the audit presentation.

A senior manager from Eide Bailey told the council the firm agreed with the presentation of the city's annual comprehensive financial report and found no material noncompliance in the areas reviewed. The auditor said the firm proposed an audit adjustment to a deposit-payable account to align it with generally accepted accounting principles; because of the nature and size of the entry the adjustment was reported as an internal-control deficiency that the auditors categorized as a material weakness for reporting purposes, though the auditor emphasized the adjustment did not change the clean opinion on the financial statements.

CFO Gerlach acknowledged the many hours of staff time the audit required and thanked Brandy Conger, the city's accounting manager, and assistant finance director Jim Adeen for leading and supporting the process. Gerlach also thanked Eide Bailey and singled out the auditor they worked with for his assistance.

The auditor walked councilors through the different auditing standards that applied to the engagement, including AICPA standards, government auditing standards, uniform guidance for federal-award testing (applicable when a government spends more than $750,000 in federal awards), and Chapter 11 of the Iowa Code for certain statutory compliance reviews. The presenter recommended councilors who want a shorter read focus on Management's Discussion and Analysis (MD&A) in the comprehensive financial report and noted the city's unassigned general fund balance measured about 25% of operating expenditures, which the auditor characterized as a healthy metric.

On federal-award testing the auditor said the ARPA program, which had been audited in previous years, was not selected for FY2025 testing because the federal government's risk designation for ARPA had been lowered for that year; the auditor cautioned the program remains in the pool for future selection. The auditor also discussed the adoption of a new GASB accounting principle that broadened the definition of compensated absences; management included related disclosures in the notes to the financial statements.

Councilors asked follow-up questions about the MD&A and year-over-year comparisons and were told that those comparisons are included in the report. The presentation concluded with the auditor and CFO reiterating that, other than the disclosed audit adjustment, the engagement raised no additional significant or reportable issues for FY2025.

The council did not take a formal vote on the audit during this meeting; staff will provide the comprehensive financial report and related materials for the record and further review.