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Bozeman Commission approves FY2025 comprehensive financial report after clean audit
Summary
The Bozeman City Commission approved the FY2025 Annual Comprehensive Financial Report and accompanying auditors’ letter following presentations by city finance staff and external auditors, who issued an unmodified (clean) opinion and reported no reportable internal control or compliance findings. The motion passed 5-0.
The Bozeman City Commission approved the fiscal year 2025 Annual Comprehensive Financial Report and the accompanying letter to governance after presentations by city finance staff and external auditors and a brief round of questions, voting 5-0 to adopt the report.
Aaron Funk, the city controller, told the commission the ACFR exists to provide “accountability and transparency” and to inform bondholders, rating agencies and local decisionmakers. Janine Hathcock, the audit partner, said the auditors issued an unmodified opinion for all audited units and found no internal-control deficiencies or reportable compliance issues. “The financial statements are presented fairly in our opinion,” she said.
The ACFR showed the city’s net position totaled about $740,000,000, an increase of $46,900,000 from the prior year. Officials said about $123,800,000 of that is restricted for specific purposes and roughly $17,000,000 is unrestricted. Hathcock noted a year-over-year drop in the city’s program revenues of about $3,100,000 and said the Schedule of Expenditures of Federal Awards (SEFA) reflects a spend-down of COVID-era federal funds.
Finance Director Melissa Hodnet told commissioners the decline in program revenues was driven primarily by lower impact fee receipts — roughly $2,000,000 of the decrease — and that the city is adjusting projections to avoid budgeting for unusually large one-off developments. City staff also flagged a slowdown in assessed-value growth and warned that federal SAFER grant funding that helped add 12 firefighter positions will decline, creating a potential fiscal pressure in later fiscal years.
Commission discussion focused on how the ACFR should inform the upcoming budget process, including use of budget-to-actual schedules and carryforwards. Hathcock said testing internal controls would require a separate internal-control engagement, not the routine financial statement audit, while staff emphasized the ACFR’s role as a backward-looking accountability document that can inform future policy choices.
The motion to approve the FY2025 ACFR and the letter to governance was moved and seconded and passed unanimously. The report will remain available to the public as issued.
