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Duluth receives clean FY22 audit; auditor flags segregation-of-duties risk
Summary
Mauldin & Jenkins presented the City of Duluth's FY22 audit, issuing an "unqualified opinion" that the city's financial statements fairly present its position under GAAP; the auditor noted segregation-of-duties risk and said new GASB pronouncements will affect future statements. Staff will place acceptance on the June consent agenda.
Mauldin & Jenkins auditor Josh Carroll told Duluth's Mayor and Council on May 22 that the city's FY22 financial statements were prepared in accordance with generally accepted accounting principles and that the audit produced an "unqualified opinion," commonly described as a clean audit. He said the audit covers the city as a whole, including the Downtown Development Authority and the Urban Redevelopment Agency.
Carroll noted a continuing internal-control concern: segregation of duties limitations that create some level of risk. He said mitigating efforts are underway and, from a cost–benefit perspective, hiring a new position to address that gap is likely not warranted because other internal controls are in place. Carroll also warned that upcoming Governmental Accounting Standards Board (GASB) pronouncements will require significant financial-statement changes in coming years.
Council authorized staff to place acceptance of the FY22 Audit Report on the next Council consent agenda, allowing the item to appear for formal approval at the regular meeting. No vote on the audit occurred at the work session.
The audit presentation provides context for the city's FY22 finances and indicates staff will continue to adjust internal controls and disclosures to comply with evolving accounting standards.
