City auditors give unmodified opinion; audit flags CRA filing and lease reporting adjustments

The City of Clermont’s independent auditors reported clean opinions for the city’s basic financial statements and for the Community Redevelopment Agency at the council’s Aug. 26 meeting, while also citing several compliance and reporting issues the city must address. Heather Mosier, the audit partner for Carr Rings and Ingram (speaker 5), told the council the financial statements received an unmodified opinion, the highest standard auditors can give.

Mosier said the audit identified one significant deficiency—an internal control issue repeated from the prior year—and two compliance findings in the management letter. The compliance items included undocumented continuing‑education for staff charged with investments under the city’s investment policy and a late filing of the CRA budget with Lake County that the auditors said violated Florida statute.

The audit also required a $3,000,000 adjustment tied to GASB 87 lease accounting: cell‑tower leases that had not previously been reported as an asset and liability must now be recorded at present value as lease receivables and deferred inflows, Mosier said. She explained that GASB 87, implemented in recent years, requires many leases to be presented on the balance sheet and that the city’s audit adjustment reflects that change.

Finance Director Scott Breuer (speaker 3) said the audit and single‑audit—required because the city had a major federal program over the $750,000 threshold—did not reveal noncompliance for the federal program (COVID‑related funding) and overall the auditors found the city’s financial reporting improved under the new firm. “It was an unmodified opinion, which means everything was clean and good,” Mosier said.

Council members pressed auditors and staff on several topics during a question and answer period. One council member asked where the $3,000,000 adjustment would appear; Mosier pointed to the government‑wide statements and the statement of net position, noting the adjustment relates to capitalization of right‑to‑use assets and corresponding liabilities under the new standard. She also told the council that GASB 103 and related MD&A presentation changes will require more narrative explanation in the annual financial report to explain year‑to‑year variances.

In a separate budget briefing also presented that evening, Breuer said the city is at roughly 81% of overall projected revenues for the fiscal year and the general fund has collected about 90%—helped in part by strong ad valorem receipts. Enterprise funds as a group were at 70% of expected revenue, but Breuer warned sewer impact fees are well below expectations and could be the lowest collected since 2021. Expenditures were about 66% of budget through the third quarter; capital spending trailed projections—roughly 40% spent in capital—prompting staff to flag potential year‑end reconciliations and amendments.

Breuer noted overtime in police and fire was near 90% of the overtime budget, and that a third pay period in the fourth quarter could require transfers or amendments. He said staff will return to council with recommended year‑end adjustments as needed.

The council did not take formal action on the audit presentation itself; staff said they will implement the management recommendations and follow up on the CRA filing requirement. The city manager and finance director also committed to working with auditors on presentation changes outlined by GASB and to post the annual report once finalized.