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Gardiner audit: unmodified opinion; general fund posts surplus while wastewater fund slips into deficit
Summary
Auditors from RHR Smith gave the City of Gardiner an unmodified (clean) opinion for FY25, reporting a roughly $1.4 million increase in general fund assets and a combined surplus; the wastewater enterprise fund showed a declining net position and an unrestricted deficit of about $422,006.
Heather Hunter, audit director for RHR Smith, told the Gardiner City Council on March 18 that the city received an unmodified (clean) audit opinion for fiscal year 2025 and that auditors had no disagreements with management.
Hunter said total general fund assets climbed by about $1,400,000 (an 11.1% increase) and the city’s total fund balance rose to about $3,900,000. Revenues for the period totaled about $13.1 million, an increase of roughly $1.1 million (8.8%), and property taxes accounted for about 67.7% of total revenues. Hunter reported a revenue-to-budget surplus of $412,151 and an overall combined surplus of about $1,100,000; the audit found that no use of fund balance was needed for the year.
At the same time, Hunter flagged deterioration in the wastewater enterprise fund. She reported the wastewater fund’s total assets near $15.7 million and a net position decline of roughly $368,000 (about 4.3%). Hunter said the fund’s unrestricted portion dropped by about $300,003.62 to a deficit of approximately $422,006.15, and noted the current ratio for the fund was 0.52, below typical industry averages.
Hunter summarized the auditors’ responsibilities and emphasized that the governing body and city staff are responsible for internal controls and accounting estimates. "Gardiner, the city of Gardiner, received the highest audit opinion out there. It's an unmodified opinion," Hunter said, adding that auditors prepare draft financial statements and may recommend material misstatement adjustments where necessary. She also told the council there were no recommendations for best-practice improvements in the management letter this year.
Councilors asked about technical accounting distinctions. In response to a question from a councilor about the difference between generally accepted accounting principles and Governmental Accounting Standards Board pronouncements, Hunter explained that GAAP applies across public and private sectors, while GASB pronouncements apply specifically to governmental entities.
Interim City Manager Denise Brown was present as staff; Hunter said the audit references show the city’s financial ratios are generally healthy across the general fund and several enterprise funds, while identifying the wastewater fund as an area warranting monitoring and management attention.
Next steps: the audit record will be filed with the city’s records and staff will continue to work on financial planning for the wastewater enterprise fund. Hunter offered to answer follow-up questions and the council thanked auditors for the presentation.
