Auditor recommends disclaimer of opinion limited to GASB 96; no material weaknesses found

Cody Savi, partner with ISER CPA, presented the draft financial statements for fiscal year ending June 30, 2023, and said auditors were largely confident in the work but will likely issue a disclaimer of opinion limited to the new GASB 96 accounting standard for subscription-based IT arrangements.

Savi told the council the GASB 96 issue arises when organizations use subscription-based IT services that, under the standard, may require recognition of both an intangible asset and a related liability in accrual-based financial statements. He said that aside from this scope limitation, auditors identified no significant deficiencies or material weaknesses in the city's system of internal controls.

Savi said there were "some minor difficulties" obtaining records, which he attributed in part to staff turnover, but that management ultimately provided requested documents. He also said the auditor firm plans a multi-year schedule to catch the city up on audits: beginning the FY 2024 audit around April with an expectation to complete in late summer, then scheduling subsequent years to return to a normal cycle.

"For 2023, we are looking at issuing a disclaimer of of opinion," Savi said during his presentation, and he emphasized that the disclaimer is specific to GASB 96 and does not indicate other findings that would modify the opinion. The council's audit committee reported it had met with auditors and was satisfied with the communication and assurances provided.

No formal action was taken by the council on the audit presentation at the meeting; council members thanked the auditor and the audit committee for their work.