External auditor gives Pewaukee an unmodified opinion, flags routine controls work

Paul France of Baker Tilly presented the city's fiscal-year 2024 financial audit to the council on Feb. 2 and said the firm issued an unmodified opinion on the statements for the year ended Dec. 31, 2024. "An unmodified opinion means the financial statements contained the necessary disclosures, accounting principles were applied consistently, and the document was free of material misstatement," France said.

France highlighted general-fund reserves of just over $5,800,000 as a sign of strong financial health. He also identified recurring, nonunusual audit findings: journal-entry adjustments made during the audit and comments about segregation of duties that reflect cost-benefit choices about filling roles and covering vacations. "Those type of comments ... are part of the audit process," France said, and he urged the council to ask management about timing and readiness for future financial statements, noting timely reporting typically occurs six to eight months after year end.

France said Baker Tilly will transition out of future audits after the current engagement; management requested an RFP and Baker Tilly decided not to bid for the next cycle because of how the process was handled and communicated. He said Baker Tilly would cooperate in a transition and remain available to management as needed.

The presentation drew no questions from the council. The auditor's recommendations called for clearer timing plans from management to ensure the council receives audited financial statements in a standard timeframe and for the governing body to be aware of journal-entry corrections and internal-control gaps.

Next steps for the council include following up with city management on the audit's recommended timing and controls improvements and overseeing the RFP process for a new external auditor.