City audit: Plante Moran issues unmodified opinion, flags two control issues

Plante Moran presented Garden City’s June 30, 2025 financial statement audit to the council on Jan. 12, announcing an unmodified audit opinion and two remaining internal-control issues.

Ramsey Abdullah, partner with Plante Moran, told council, “Plante Moran has issued an unmodified opinion on your financial statements,” meaning the auditors consider the statements materially accurate and compliant with applicable standards. The firm handed council an audit report and a condensed graph packet summarizing key financial trends.

Auditors said two internal-control matters remain. Abdullah said auditors identified “several journal entries that were required to be posted to close the books” and characterized this as a material weakness. He said management agreed with and posted the entries and that the adjustments are reflected in the financial statements. On payroll, audit staff reported a significant deficiency related to segregation of duties for payroll data entry and recommended a secondary review by someone outside the payroll process to confirm accuracy.

Phil Famininio, audit manager, reviewed financial highlights: general fund revenue decreased roughly $50,000 from the prior year largely because a one-time $1.1 million pension grant did not recur; the city reported about $4.0 million in unassigned fund balance (about 14% of the city’s 2026 budgeted expenditures); and overall fund balance fell by about $982,000 because expenses exceeded revenues. He noted the general fund recorded a planned use of fund balance of $993,000, below the amended budgeted use of $1.8 million.

Famininio also discussed the water and sewer fund, which showed higher operating revenues (about $600,000) but a cash deficit at year end subsidized by an interfund loan from the general fund due to timing of reimbursements for Drinking Water State Revolving Fund projects.

Council members asked clarifying questions about the 2024–25 comparisons, and auditors explained changes in assigned versus unassigned balances and the reasons for the reductions in certain assigned balances. City Manager Tim Gibbons and Treasurer Shannon Shepherd were thanked for staff work on the audit.

The audit packet contains additional recommended legislative and informational items, including material on pension and OPEB liabilities that council may review further.