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Richmond audit yields clean opinion; auditor flags material weakness in EDA bond reporting
Summary
CLA told the Richmond City Council it issued an unmodified (clean) opinion on the FY2025 financial statements but reported one material weakness related to Economic Development Authority (EDA) bond reporting and included six management recommendations, including staffing and internal-control improvements.
CLA principal Greg Miller presented the results of the fiscal year 2025 audit to the Richmond City Council, saying the firm issued an unmodified ("clean") opinion on the city's financial statements while identifying one material weakness related to the reporting of EDA bonds.
"We did issue an unmodified opinion," Miller said, and added that the firm "did issue 1 material weakness as it relates to the reporting of EDA bonds within the ACFR itself." He told council members the federal single-audit portion remained in process and that auditors rely on information from component units that other auditors audit separately.
Chief Administrative Officer O'Donnell told the council the delay in issuing the ACFR did not affect budget development: "The delay does not, impact budget development or the decision making process," he said, and added that the administration met state notification requirements. O'Donnell also said the city has partnered with CLA to strengthen internal controls and financial reporting processes moving into FY26.
Miller outlined other audit work and deliverables: tests of internal controls, a Schedule of Federal Expenditures (SEFA) review, and agreed‑upon procedures performed for the sheriff's office and VRS data. He said six recommendations were included in the management-letter, the most prominent addressing Finance Department staffing and bench strength. Miller also noted two new GASB standards (GASB 101 and GASB 102) affected the timeline.
The auditor emphasized that auditing provides reasonable—not absolute—assurance and uses sampling. On the inmate canteen matter raised by Council Member Trammell, Miller said it related to the timing of telephone-commission deposits that the Sheriff's Office remediated once identified.
Next steps: the council asked the administration to deliver additional supporting materials requested during questioning, and CLA will complete the single-audit work and any outstanding appendices. The presentation closed with a commitment from city staff to accelerate timelines with component units so future ACFRs are produced on time.
