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Independent auditor gives Yuma a clean opinion on FY2025 financials, no federal findings reported
Summary
Baker Tilly partner Brian Hemmerly told the council the FY2025 financial statement audit returned a clean opinion, there were no findings in four major federal programs, and internal controls tested appear to be operating effectively.
Brian Hemmerly, lead audit partner from Baker Tilly, told the City Council the city's FY2025 comprehensive financial report received a clean audit opinion and the government-auditing-standards compliance report had no matters requiring reporting to management.
Hemmerly said the federal single-audit covered four major programs — Community Development Block Grant entitlement, HOME Investment Partnerships, an economic development initiative, and Coronavirus State and Local Fiscal Recovery Fund expenditures — and that all four received clean opinions with no findings on how the federal funds were spent. He reported $15,500,000 in federal spending in the FY ending 6/30/2025.
On fund results, Hemmerly highlighted a general fund operating-revenue increase of about $6.8 million and reported a net positive change in enterprise fund positions (water fund operating surplus of $4.4 million; wastewater operating deficit of $2.0 million offset by investment income and capital contributions).
Hemmerly noted auditors provide reasonable (not absolute) assurance and that as the independent auditor they must remain independent, so they cannot assist the city with ballot campaigns or other advocacy. He also flagged carry-forwards and some accounting classifications staff will finalize for the state's annual expenditure limitation report due by March 31.
Council members asked when the city first showed signs of approaching the state's expenditure limitation. Hemmerly said this is Baker Tilly’s second year auditing the city and that auditors observed carry-forwards and trends in the prior year that indicated the limit could be a near-term issue, but that the city has the cash on hand and the limitation is a statutory cap tied to older economic estimates.
What’s next: staff and auditors will finalize related disclosures and the annual expenditure limitation report to the State Auditor General. The audit findings (none) and the MD&A are part of the Annual Comprehensive Financial Report for public review.
