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Auditors report clean opinion for Battle Creek but flag one material weakness
Summary
Auditors from Raymond Robson gave Battle Creek an unmodified "clean" opinion on its fiscal 2025 financial statements, reporting one material weakness tied to audit adjustments and unmodified compliance opinions on three federal programs; commissioners agreed to work with staff on corrective steps.
Nathan Baldererman of Raymond Robson told the Battle Creek City Commission on Feb. 17 that the firm issued an unmodified, or "clean," opinion on the city's 2025 financial statements while noting one material weakness related to audit adjustments.
"We did issue an unmodified or a clean opinion on the financial statements," Baldererman said, adding that the opinion gives "reasonable assurance" that the statements are fairly stated in all material respects. He said auditors are required to report significant deficiencies or material weaknesses and that the material weakness this year was tied to audit adjustments detailed in the single audit report.
Baldererman outlined two accounting-standard changes implemented during the year: a revised compensated-absences standard that changes how liabilities for leave are calculated, and a newer "risks and uncertainties" disclosure standard introduced after the pandemic. He said the compensated-absences change increased certain liabilities but did not require a restatement of beginning balances because the effect was relatively small. On risks and uncertainties, he said the city's evaluation found no additional disclosures were required.
The auditors performed a single audit because the city spent more than $1 million in federal awards; they tested three programs — the federal transit cluster, ARPA funds, and the Medicaid cluster — and reported unmodified compliance opinions for each. Baldererman also noted that findings from the previous year were not repeated.
Baldererman commended city staff for implementing new systems during the year and said the city’s annual comprehensive financial report should continue to meet GFOA standards. He said auditors will work with finance staff on required presentation changes in next year’s report and on corrective actions related to the identified material weakness.
Commissioners thanked Baldererman and had no substantive follow-up questions during the meeting. The city manager and finance director will coordinate corrective action and report back as part of the audit follow-up process.
