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Truth or Consequences accepts 2025 audit; auditors cite repeat purchase-order and IT control findings
Summary
The City Commission approved Resolution 5325 after auditors issued a clean opinion on the city's financial statements but identified repeat procurement, inventory, IT controls, cash-handling and capital-asset findings. City staff said many issues are already being addressed.
The Truth or Consequences City Commission on Monday voted to accept the city's 2025 audit after an accounting firm delivered a clean opinion on both the financial statements and federal-awards testing while reporting several findings requiring correction.
"We did issue an unmodified but clean opinion on the financial statements," said Scott Eliason, a partner with Haddon Mueller County Group, during the commission meeting. He told commissioners the firm also reported findings including purchase orders issued after invoice dates, unsupported inventory balances, weaknesses in IT general controls and gaps in capital-asset records.
Eliason said the audit's timing had been affected by a delayed federal compliance supplement and that the auditors take a risk-based approach to sampling and testing. He also noted the city's housing authority no longer met the criteria to be presented as a component unit in the city's financial statements.
Commissioners and staff discussed next steps. "We were made aware of an accounting error and the audit team will go back and correct that," said a member of the finance leadership team. Jocelyn, finance manager, said the finance office has begun reconciling open items and will present a corrected capital-asset approach, including exploring a Tyler software module to improve asset tracking.
City manager also told the commission the city had already identified several of the issues internally and had begun correcting them. "Management did identify inventory controls as an issue before the audit process even started," he said, adding that the city had started updating IT and cash-handling policies.
During the meeting a commissioner expressed concern about the repeated purchase-order finding. Eliason described that issue as carried forward three years in a row based on a statistical sample in which five of 40 tested transactions lacked properly issued purchase orders before invoices.
The commission moved to approve Resolution 5325 accepting the audit report; the motion passed on roll-call vote. Officials said they will continue implementing corrective steps and expect the next audit cycle to reflect improvements.
The meeting record shows staff will pursue additional training with the state auditor on accrual conversions and continue work on capital-asset reconciliation and IT controls. The commission closed the item after discussion and the formal vote.
