Fort Thomas auditors give unmodified opinion; council weighs costly forensic review of prior accounting

John Jengrelin, CPA and partner at Jengrelin Owen and Company, told Fort Thomas city council on Jan. 20 that his firm issued an unmodified opinion on the city’s financial statements for the year ending June 30, 2024, finding no material weaknesses or significant deficiencies requiring modification. "That is the highest opinion that we give," he said, and added the audit found compliance with Kentucky law and federal requirements tested under 2 CFR 200 for ARPA funds.

The presentation itemized adjustments the auditors made: a planned pension liability reduction of about $1.6 million, an OPEB liability reduction of about $1.2 million, and a $1.4 million long‑term receivable and deferred revenue entry tied to the National Opioid Settlement, which the auditor said the city will receive in roughly equal payments over the next 12 years. Jengrelin summarized the city’s fiscal position as roughly $20.1 million in total assets and a fund balance near $16.9 million, with revenues of about $23.9 million and expenditures of $21.7 million.

Following the audit presentation, council returned to a longer debate over whether to hire a forensic auditor to examine earlier bookkeeping. The city’s audit report documented prior‑period adjustments totaling roughly $322,000 that auditors described as the cumulative effect of long‑standing reconciliation and recording lapses. The mayor said state and federal law‑enforcement agencies and the state auditor’s office declined to investigate further, telling the city they found no evidence of fraud and that the issues appeared to be "sloppy bookkeeping." The mayor and council members said they want clarity on whether a forensic engagement would produce actionable findings and at what cost.

Officials said bids for a forensic review varied considerably depending on scope. Staff reported a low bid starting around $35,000 and other proposals exceeding $100,000, with the estimated cost rising if the scope covers multiple fiscal years or paper records that moved during a building remodel. Several council members urged caution, asking the city’s auditors and prospective forensic firms to describe likely outcomes and the probability of uncovering evidence beyond bookkeeping errors before committing funds. "We need to know what the endgame is," one councilmember said, asking for clearer deliverables and cost‑benefit analysis before authorizing spending.

Next steps: staff said they will continue interviews with prospective forensic vendors, refine the scope, and return to council with detailed proposals and recommendations at the next meeting. The council did not authorize a forensic engagement on Jan. 20.