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External auditors give Newport News an unmodified opinion; one material weakness corrected
Summary
External auditors reported an unmodified opinion on the city's FY2025 financial statements, found no reportable noncompliance or fraud, and noted one material weakness that the city identified and corrected during the year; federal-program testing remains ongoing.
Zack Lamorta, the manager of the external audit team, told the Newport News City Council at its year-end work session that auditors issued an unmodified opinion on the city's financial statements for the fiscal year ending June 30, 2025, the highest level of assurance an auditor can provide. "We audit the financial statements of the City of Newport News for the year ended 06/30/2025 and had an unmodified opinion, which is the best opinion you can have," Lamorta said.
Lamorta said auditors did not note reportable noncompliance or significant accounting policy issues and found no evidence of fraud or acts that would impair the city's ability to continue as a going concern. He acknowledged that auditors identified one material weakness during the year but said the city had previously identified and corrected the issue during the year. "It was still an unmodified opinion at the end of the day," Lamorta said, describing the overall result as a "very clean audit." Ned Smither, the city's interim director of finance, and city staff were recognized for coordinating the annual comprehensive financial report.
Auditors also described other recurring procedures: agreed-upon procedures for the sheriff, census testing for the Virginia Retirement System, and rotating federal-program compliance reviews. Lamorta said the federal-program compliance review is still in progress and the related report will be released later. He noted the firm provided one nonattest service this year—assistance preparing the single-audit data collection form—and said management accepted responsibility for that work.
The auditor discussed accounting standards implementations and forthcoming changes related to GASB 101 and GASB 102 and noted no inappropriate accounting policies or significant related-party transactions during the year. He said auditors report corrected and uncorrected misstatements when relevant; none required city-wide adjustments that affected the audit opinion.
The presentation closed with an invitation for council questions; none were raised beyond expressions of thanks to the audit and finance teams. The report as presented shows the auditors' confidence in the city's fiscal reporting while noting one corrected control weakness and that federal compliance work remains under review.
