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City auditors issue clean opinion, flag budget reporting and self‑insurance deficit
Summary
Auditors gave Clinton's 2025 financial statements a clean (unmodified) opinion but recorded one audit finding for funds that exceeded budget and highlighted a new self‑insurance health fund that closed the year with a roughly $260,000 deficit.
Gary Mitchell of Pew Pew and Company told the Clinton City Council the firm issued an unmodified, or "clean," opinion on the city's 2025 financial statements and highlighted a single audit finding tied to budget compliance.
"In our opinion the financial statements are, fairly presented in all material respects," Mitchell said, summarizing the audit opinion. He said governmental activities showed assets increased by about $6,000,000 in 2025 and net position rose roughly $4,700,000 compared with 2024, largely because of capital projects such as streetscapes and JC Park work.
The auditor pointed council members to one required finding: the general fund exceeded its adopted budget by about $360,000 for the year, and the drug fund exceeded its budget by a smaller amount. "That's the one and only finding that we had for our audit for this year," Mitchell said, and the report lists a management corrective action plan.
Mitchell also highlighted a newly created self‑insurance health fund that finished the year with "a deficit of about $260,000 mainly because of the timing of claims and claims liabilities being a little bit higher than anticipated." He recommended closer monitoring of claims and adjustment of premiums or reserves to avoid repeated shortfalls.
Finance staff (Paula) noted the city's unassigned general‑fund balance remained strong (about $7,000,000, roughly 39% of typical annual expenditures), and council discussed the timing of budget amendments and the need for tighter forecasting in May and June to prevent future budget‑level findings. Mitchell said the city's debt is on track to be largely paid off in 2026, leaving more flexibility going forward.
The audit presentation closed with the firm's recommendation that management routinely compare expenses to budget and bring timely amendments when needed; the audit report includes the auditor's required communications and a brief list of immaterial uncorrected items for council review.
The council did not vote on the audit itself but thanked the auditor and staff for the presentation and noted staff would carry forward the recommended corrective actions.
