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City auditor issues clean FY25 opinion but flags material weakness in controls
Summary
SB&Co. reported an unmodified (clean) opinion on Glenarden City’s FY25 financial statements, disclosed a material weakness tied to year‑end adjustments and interfund entries, and told council the city held about $9.8 million in cash versus $6.6 million in annual expenditures.
SB&Co. issued an unmodified—or “clean”—opinion on Glenarden City’s fiscal year 2025 financial statements, but auditors also reported a material weakness in internal control that required management to record several year‑end adjustments.
The finding came during a presentation by Bill Seymour, the engagement partner with SB and Company, who told the Glenarden City Council the firm did not identify fraud in the course of testing but did require adjustments to bring the trial balance into alignment with generally accepted accounting principles. Seymour said the adjustments involved interfund due‑to/due‑from accounts, depreciation entries and other items that management subsequently recorded.
The audit covers the fiscal year ending June 30, 2025, and includes the statement of net position as of year‑end and the statement of revenues, expenditures and changes in fund balances for the entire fiscal year. Seymour told council the city’s cash and investments are its most significant assets and that, as of year‑end, the city had just under $9.8 million in cash compared with roughly $6.6 million in total expenditures for the year.
Seymour described the audit approach—risk assessment, control testing and substantive procedures—and cautioned the audit was not a fraud‑specific engagement, though the firm did not note any instances of fraud in the areas it tested. He also disclosed that SB&Co. provided some non‑attest services, including assistance with drafting the financial statements and required uniform guidance reporting, and said the firm had concluded those services did not impair independence.
Council members asked whether the audit covered only the month of June or the full year; Seymour clarified it covers the full fiscal year but reports balances as of year‑end. Treasurer Stewart said he will circulate the management representation letter and the schedule of adjustments to council members who requested them.
The council did not take formal action on the audit during the meeting; Seymour offered to provide additional documentation and said he received full cooperation from management during the engagement.
