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Dardenne Prairie audit returns unmodified opinion; auditors flag budget amendment and journal‑entry controls
Summary
External auditors issued an unmodified opinion for the year ended 12/31/2024, noted two audit journal entries and that pension disclosures show assets exceed projected liabilities; auditors recommended routine budget amendments when expenditures exceed appropriations and stronger review of journal entries.
Michelle Graham, the external auditor, presented the city’s financial statements for the fiscal year ended Dec. 31, 2024, and said her firm issued an unmodified opinion, the strongest available. She told the board the city uses a modified cash/modified accrual basis for governmental accounting and that footnote disclosures—especially pension disclosures—are integral to assessing financial position.
Graham said auditors proposed two journal entries during the engagement: an accounting entry to reflect county road funds that are noncash transactions and an entry to record court cash and the associated liabilities. She emphasized that journal entries should be reviewed by a second person and supported with documentation to reduce risk of error or manipulation when the accounting function is concentrated in a single staff member.
On pensions, Graham reported the plan covers 21 participants with six current benefit recipients and said the actuarial discount rate used in disclosures was 7 percent. Under that assumption, plan assets exceeded projected liabilities; she illustrated that a one‑percentage‑point change in the discount rate materially alters the net liability/asset position.
The auditors also recommended the city comply with state budget statutes by amending budgets when expenditures exceed appropriations. Graham noted two funds (general fund and parks/stormwater fund) had expenditures in excess of budgeted amounts and advised amending budgets after the fact if not done prior to spending.
The presentation included work on the city’s ARPA/SLFRF expenditures. Because a large share of federal spending during the year related to SLFRF funds, the auditors performed an alternative compliance audit on those funds rather than a full single audit and reported compliance in the areas tested.
The board did not take formal action at the work session; the audit materials and auditor recommendations will be included in meeting records and available for the regular meeting.
