External audit gives Atlanta a clean opinion for FY2025; auditors flag management recommendations

Marlin and Jenkins partner Doug Moses delivered the FY2025 audit results to the Finance Executive Committee, reporting an unmodified (clean) opinion on the city’s financial statements and component units including aviation and watershed.

Moses said auditors noted implementation effects from GASB guidance on compensated absences and that the audit produced no financial-statement findings; auditors provided recommendations and a small number of nonmaterial adjustments that management agreed were immaterial.

CFO (referred to in the presentation) and deputy finance staff highlighted that the city closed FY2025 with an approximate $19 million deficit instead of a projected $33+ million shortfall, crediting coordinated actions across finance, HR and the mayor’s office. The general fund balance remains within a targeted benchmark (roughly 15% of expenditures), declining from previous highs but still in range.

Key audit and financial highlights presented:

- Fund balance: general fund reserves decreased by about $19.6 million year over year but remain near the 15% benchmark. - Enterprise funds: Watershed net position increased ~$189 million; Aviation net position increased ~$191 million despite an operating loss offset by investment and nonoperating revenues. - Pension funding: general employees funded at ~75.1%, firefighters ~80.6%, police ~84.5%. - OPEB (other post-employment benefits): liability rose from ~$739 million to ~$922 million; actuaries will review FY26 assumptions. - Deficit funds: number of deficit funds reduced to two (group insurance and sanitation); auditors urged adherence to scheduled repayments for interfund advances (sanitation repayment was below schedule in FY25).

Management recommendations included: strengthen repayment plans for sanitation fund advances, improve grant accounting and tracking to reduce late adjustments, correctly present debt principal decreases at the fund level, tighten year-end cutoff controls for aviation liabilities, and address census and payroll deduction exceptions in retirement-plan testing (auditors flagged remittances totaling about $29,000 for correction).

Council members commended finance staff for achieving a clean audit, noting it is the first year without findings in several years. The auditor said the single-audit (federal programs) work remains in progress with expected completion by March 31.

The committee asked staff to continue implementing the recommendations; no ordinances specific to audit findings were adopted at the meeting.