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City releases FY24-25 audit: general fund deficit eliminated, auditors flag restatements and 21 adjustments
Summary
Auburn's finance director presented the FY24-25 comprehensive annual financial report confirming elimination of the general fund deficit; external auditors issued a clean opinion but reported 21 corrected misstatements and a material-weakness disclosure tied to restatements and implementation of a new accounting pronouncement.
The Auburn City Council received the city's FY24-25 Annual Comprehensive Financial Report (ACFR) on Feb. 9, 2026; Finance Director Gretchen Hoskins told council the general fund deficit has been eliminated as of June 30, 2025, but the external audit identified 21 corrected misstatements and required a material-weakness communication.
Hoskins said the audit adjustments (21 in total, up from six the previous year) included 12 items related to FY24-25 and were often tied to grant accounting and a loss of institutional knowledge. She described a $600,000 audit adjustment that resulted from an incorrect capital-account classification for grant-funded transit vans; city staff reclassified the purchase from a transport-facilities account to equipment.
Eide Bailey auditors told the council they issued an unmodified (clean) opinion on the financial statements after management corrected proposed adjustments. The auditors also noted two emphasis-of-matter items in their communication: one related to a restatement and a second tied to implementation of a new accounting pronouncement (compensated-absences recognition). The audit team said they identified significant risks related to revenue recognition (grants), pension and OPEB assumptions, and the implementation of new accounting standards, and performed additional procedures as required.
Audit lead remarks emphasized that while the city received a clean opinion, the number of audit adjustments and a required restatement triggered the material-weakness reporting. The auditors said management has posted the adjustments and that the city has engaged in process changes and policy updates to address grant-handling and accounting classification issues.
Council members thanked Hoskins and audit staff for closing the audit on time and asked staff to provide a more detailed tally of issued short-term rental permits and any code-enforcement history related to the previously discussed permit (the latter item was noted as not showing code-enforcement cases for 180 Greenfield). The auditor said the single-audit of federal awards was in progress and expected to be issued by the federal deadline of March 31.
No council action was required on the presentation; staff said they would follow up on requested details and continue implementing process improvements noted in the audit.
