Deloitte gives Austin a clean FY2025 audit opinion but flags a $13M pension valuation control issue

The City's FY2025 Annual Comprehensive Financial Report (ACFR) received an unmodified (clean) audit opinion from Deloitte, the city's external auditor, the committee heard on April 15.

Maria Norton, the city controller, introduced the audit team and noted the ACFR was issued on March 6, 2026. Tracy Cooley and Madeline Morris of Deloitte reported that while the audit yielded a clean opinion on the financial statements, auditors identified one significant deficiency related to the firefighters' retirement plan valuation and the incorporation of House Bill 2802. Deloitte told the committee the impact was approximately $13,000,000 and recommended stronger management review when legislative or plan changes affect actuarial valuations reflected in the city's statements.

Deloitte also discussed recently adopted and upcoming GASB accounting standards that affected compensated absences and will produce additional disclosure changes next year. The federal and state single audits remain in process; the passenger facility charge compliance audit is substantially complete and will be issued shortly. Deloitte reported full cooperation from city management and staff during the audit process.

During Q&A, committee members asked whether timing or measurement drove the pension item; auditors described it as a timing/valuation incorporation issue and not a material misstatement to the ACFR. City staff acknowledged the item and said they will strengthen review processes to ensure legislative or plan changes are accurately reflected in future statements.