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Bowie accepts 2024–25 audit; auditor flags material weakness in grant accounting
Summary
The Bowie City Council accepted the city's 2024–25 financial audit. Auditor Valerie Halverson told the council the statements are fairly presented, but the audit identified a material weakness tied to grant revenue recognition and a restatement for a component unit.
The Bowie City Council voted to accept the city's fiscal year 2024–25 audit after a presentation by auditor Valerie Halverson of NWH Group.
——"We believe the financial statements are fairly presented in all material respects," Halverson told the council, summarizing the independent auditors' report. She said the city's net position increased to about $37.4 million, with roughly $12 million unrestricted and an unassigned general-fund balance of about $4.9 million.
Halverson said the audit included an emphasis-of-matter paragraph because one component unit required a restatement: funding previously reported as grant revenue was reclassified as local funding, creating an unearned revenue liability that was corrected in this year's statements. She also reported one material weakness: "material audit adjustments related to grant revenue recognition," largely tied to accounting and timing for grant-funded projects associated with a component unit, the EDC.
When asked to clarify, Halverson said, "the material weakness is the accounting for grant reporting. So, we had material adjustments related to grant revenue recognition and so we reported [a] material weakness." She also said the audit did not identify compliance issues with how grant funds were spent, only with timing and recording.
Councilors moved and approved a motion to accept the audit as presented by Halverson. Roll-call responses recorded assent from the council members present.
The accepted audit packet includes the independent auditors' report, management's discussion and analysis, the basic financial statements, notes, and a report on internal control and compliance that documents the accounting adjustments and the single material weakness. The auditor also reported that overall revenues were about $23 million for the year, expenses about $20 million, and that the enterprise and component units showed modest increases in net position.
Council staff said they will work with the component unit (EDC) to address the timing and recording issues noted in the internal-control findings and will present any corrective steps in future governance materials.
The council's acceptance completes the audit review for the year ended Sept. 30, 2025; the audit materials were prepared by Matthysse West and Huffiness and presented by Valerie Halverson of NWH Group.
