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City audit yields clean opinion but flags repeated reporting and budgeting findings, auditor says
Summary
Pew CPAs presented a clean audit opinion for the fiscal year ending June 30, 2025, while identifying three findings — two repeats — tied to financial reporting/account reconciliations and budgeting controls; staff and auditors outlined steps to improve systems and monitor amendments.
City auditors presented the fiscal 2025 audit to Oak Ridge City Council and said they issued an unmodified (clean) opinion on the city's financial statements while reporting three findings that require council attention.
Gary Mitchell of Pew CPAs told council the auditor's report highlights included a clean opinion and a decrease in unrestricted net position, driven in part by capital investment in the electric and water/wastewater systems and a $12 million interfund loan made after the fiscal year end to support the water department. "We are pleased to be able to present a clean audit opinion on the financial statements again this year," Mitchell said.
Mitchell identified three written audit findings in the findings and question cost section of the report. Two were repeat findings from the prior year related to financial reporting and account reconciliations in the Kayenta system; auditors said the finance department is still working to get the system to produce consistent reporting and reconciliations, though improvements were noted. The third finding concerned budgeting controls, specifically line‑item level budget exceedances related to the emergency communications district and charter language.
Auditors also noted a new accounting pronouncement adopted during the year that affected presentation and prompted an emphasis‑of‑matter paragraph; the report included disclosure of subsequent events tied to the $12 million interfund loan and several audit adjustments and immaterial statement corrections.
Council and staff discussed next steps. Mitchell recommended continuing vendor support and process changes to improve Kayenta reconciliations and capital asset tracking. Council members acknowledged the improvements but pressed for regular monitoring and timely amendments where necessary.
Next steps: Staff will continue to work with finance vendors to strengthen reconciliations and bring timely budget amendments to council when required; the full audit report and management's discussion and analysis were made available to council.
