Lake Havasu Council accepts FY2025 audit after auditors note one restatement
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Summary
External auditors delivered clean opinions on the city's FY2025 financial statements and major program compliance but reported one restatement tied to allocation of investment earnings; council voted 6-0 to accept the audit.
Lake Havasu City Council on Feb. 24 voted unanimously to accept the city's annual financial report and audit for the fiscal year ending June 30, 2025.
Jean Dietrich, principal auditor for CliftonLarsonAllen LLP, told council members the firm performed the audit in accordance with generally accepted auditing standards and government auditing standards and issued clean, unmodified opinions on the city's financial statements and on compliance for each major federal program. "We have issued clean, unmodified opinions on those reports," Dietrich said during the presentation.
Dietrich said auditors used a risk-based approach and tested two major federal programs: the Coronavirus State and Local Fiscal Recovery Funds and the federal transit cluster, which together accounted for approximately $4,300,000 of federal expenditures and roughly 61% of the city's federal spending for the year. She also reported one financial reporting restatement related to how investment earnings were allocated for a newly created second-bridge fund and one compliance finding tied to suspension/debarment checks; management has proposed corrective actions for both items.
City finance staff explained the restatement during council questions. Trina Ware, who led the city's presentation, said the council-designated $35 million state appropriation for the second-bridge project was recorded in a new major fund and that the interest allocation tied to that balance was missed in an earlier allocation entry. "We moved the $35,000,000 to a fund ... to keep it more transparent," Ware said, and the city subsequently retroactively allocated interest earnings to the bridge fund.
Vice Mayor David Diaz asked about the required supplementary information and the auditor's statement that limited procedures did not provide an opinion on certain forward-looking material; Dietrich said that it is standard practice not to opine on management's discussion and analysis or actuarial estimates for pension or OPEB.
Councilmember Nancy Campbell moved to accept the audit and the annual comprehensive financial report; the motion carried 6-0. Mayor Sheehy thanked auditors and staff for their work.
The audit and its accompanying reports will be posted with the city's governance materials; council members asked staff to provide the council with the exact retroactive interest allocation amounts for the second-bridge fund on request.