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Waverly council accepts 2024–25 audit; auditors flag ARPA asset transfers and two recurring control matters
Summary
Auditors from HVE, LLC presented the annual financial report for the year ending Sept. 30, 2025, noting both an unmodified and a qualified opinion on different statements, a large ARPA-related capital transfer to the water fund, a sizable debt-service payment from a 2025 bond, and two recurring internal control items. Council voted to accept the audit 3-0.
Waverly’s city council voted to accept the 2024–25 annual audit presented by HVE, LLC, after auditors summarized key figures and persistent control issues.
“Kylie,” the presenting auditor, told the council the audit covered financial statements as of Sept. 30, 2025, and that the firm issued both an unmodified and a qualified opinion on different statements. The auditors explained they use different bases of accounting for different statements and perform focused testing on areas of higher risk.
Auditors highlighted several items that drove year‑over‑year changes: larger grant and donation receipts (including about $450,000 tied to water conservation work and civic/community center financing), a transfer of ARPA-related funds into the water fund as capital assets, and a substantial 2025 debt payment resulting from a 2023 bond refinancing. “The ARPA funds moved into capital assets in the water fund,” the presenter said, and that increased depreciation in business‑type funds going forward.
The auditors also reported two recurring internal control matters: limited segregation of duties due to small staff size, and the city’s reliance on the auditors for financial statement preparation. The firm said there were no material disagreements and no material audit adjustments.
Committee member Dave moved to accept the audit; the motion carried 3‑0.
Why it matters: The audit documents how one‑time federal/state recovery funds and capital projects are affecting the city’s financial position and ongoing depreciation and debt-service obligations. The flagged internal controls—common in small municipalities—could affect future audit risk and should guide council decisions about staffing or procedural changes.
The council took no further action beyond formally accepting the audit. The auditors and city staff said they will proceed with any required closeout reporting related to federal recovery funds and follow up on the disclosed internal control items.
