Auditors issue clean opinion for Sweet Home’s 2023 financials but flag two material weaknesses; 2024 audit targeted for early 2026

Ryan Pasquerella of REDW told the Sweet Home City Council that the city’s financial statements for the year ending June 30, 2023, were issued with an unmodified (clean) opinion dated Oct. 31.

Pasquerella said auditors provide "reasonable assurance" against material misstatement and emphasized that the clean opinion does not mean every line item is proven exact. "My job as an auditor is to give reasonable assurance there are no material errors in the financial statements," he said.

The audit report included two findings, both classified as material weaknesses. The first involved timing and budget compliance: the city’s financial statements were filed well beyond the six‑month deadline and auditors identified expenditures that exceeded appropriations in the original 2023 budget. The second related to the year‑end account‑reconciliation process. Pasquerella said mismatches appeared in cash, accounts receivable, accounts payable and accrued liabilities and that some items were recorded incorrectly or not recorded at all.

When a councilor asked about an $89,000 fixed‑asset misstatement, Pasquerella described it as a past adjustment that was not material to the overall financial statements and said management sometimes elects not to post smaller adjustments immediately because of the number of accounts affected. He recommended strengthening the year‑end reconciliation process and more timely subsidiary‑ledger reconciliations to the general ledger.

Pasquerella told council auditors had received roughly 80% of preliminary 2024 materials (including documents delivered Dec. 6) and planned to begin substantive work in January. He set a personal target to complete the 2024 audit by March–May 2026 if no major issues arise, noting typical slow periods for audit staff early in the year.

Council was told Director Brown will return in January with a plan of action to address the 2023 findings; that plan is required for the council to formally accept the audits and file them with the state. Pasquerella said the plan should roll forward prior corrective steps and include the policy that subsidiary ledgers and supporting schedules be reconciled to the general ledger on a monthly or otherwise timely basis.

The council approved the consent agenda earlier in the meeting; the clerk recorded six ayes and no nays on that vote.

The auditor and council members expressed appreciation for staff who worked on the files and for efforts to bring the city’s audits up to date. Pasquerella said he expected REDW to return for an update later in the year.