Highland City audit returns clean opinion; auditors find no material weaknesses

Steven Rowley, the engagement partner for the city's financial-statement audit, told the Highland City Council on Feb. 3 that the FY2025 audit produced an unmodified opinion, meaning the financial statements “present fairly in all material respects” the city’s financial position. The audit also found no reportable instances of noncompliance for federal awards and no deficiencies in internal control that would require formal findings.

Rowley said the audit covered the governmental and business-type activities of Highland City and included required supplementary information such as management’s discussion and analysis. He told the council that the auditors performed sampling, confirmations and risk assessments and that the work supported both the opinion on the statements and the separate federal-single-audit compliance report. Rowley reported roughly $1.7 million in federal funds expended in FY2025 and said testing disclosed no material compliance exceptions for those programs.

Council members asked several technical questions about typical risk areas the auditors focus on, including revenue recognition, receivables reconciliation and accounts payable accruals. Rowley said those are common audit focal points and that the city’s processes and controls reduce risk. He also described how state audit offices sometimes perform deeper follow-ups when tips or specific concerns arise, which can surface minor transactional issues not captured in a financial-statement audit.

The council recessed questions after commending staff for the result. Mayor Bill and several councilmembers thanked finance staff and department heads for work that Rowley said supported the clean outcome.

Ending note: The auditor said he was available to answer follow-up questions and the council moved on to other agenda items after the presentation.