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Portsmouth audit: FY25 financial statements receive clean opinion, auditors note IT best-practice recommendations
Summary
Auditors told the Portsmouth City Council that the city's FY25 financial statements received an unmodified (clean) opinion, with no significant internal-control or compliance findings; auditors offered IT-related best-practice recommendations in a management letter.
Auditors from CLA told the Portsmouth City Council on Jan. 20 that the city's fiscal year 2025 financial statements received an unmodified — or clean — opinion and that they found no material misstatements, significant internal-control deficiencies, or compliance issues.
The presentation, led by Matthew Hunt (joining from Zoom) and Phil Wang (in person), summarized audit objectives and highlighted financial trends. "I'm happy to report that the city's financial statements contain what is referred to as an unmodified opinion," Hunt said, adding that the firm did not identify any material misstatements or significant control weaknesses.
The auditors identified several financial highlights: about $33 million in long-term debt outstanding at June 30, 2025; a modest decrease in the city's pension liability (from about $110 million to $105 million); and small changes in OPEB (other postemployment benefits) liabilities. Enterprise funds for water and sewer showed positive net position changes, the auditors said.
The management letter accompanying the audit did not identify reportable control weaknesses but included IT-related recommendations. Auditors noted that an acceptable-use policy had not been recently reviewed and recommended documenting annual IT risk assessments and formalizing backup-and-recovery policies. "We identified several recommendations related to information technology," Wang said, urging the city to document risk assessments and tighten administrative privileges for school‑department applications.
Councilors asked follow-up questions about how actuarial changes and health‑insurance trends affect OPEB, and auditors explained that actuarial assumptions and changing rates can drive modest year‑to‑year fluctuations. City staff indicated they expect to address management‑letter recommendations during the current fiscal year.
Council President and councilors thanked the finance team and the auditors for the clear presentation; the city will post the comprehensive financial report and the auditors' summary to the finance department page on the city's website for public review.
