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Council accepts 2025 financial audit, auditor reports no noncompliance
Summary
The Litchfield City Council accepted the 2025 financial audit, heard that utility funds generally maintained debt‑service capacity despite expense increases, and was advised of two recurring internal control matters and upcoming GASB reporting changes.
Justin, the city’s auditor, presented the 2025 financial audit and walked the council through major fund results and changes to reporting standards. He said the sewer fund showed a cash decline partly because $3 million had been loaned to the Lark infrastructure fund pending state reimbursement, and that increased professional services for bio‑solids contributed to higher sewer expenses. "We came across no issues of non‑compliance," Justin said, and noted two recurring control items: limited segregation of duties and auditor‑prepared financial statements.
On the electric fund, council members asked why net income declined from about $1.9 million to roughly $787,000 between 2021 and 2025; Justin said he would follow up and look more closely at depreciation and rising purchase‑power costs. He also described GASB 103 and 104 changes that will alter the format and disclosures of management discussion and analysis and certain capital asset disclosures starting with the fiscal year ending Dec. 31, 2026.
After questions about the $6 million state reimbursement and other follow‑ups, the council moved and seconded a resolution to accept the audit (Res. 26‑6‑91). The resolution was approved by roll call. The auditor provided contact information for follow‑up questions and offered to supply more detail on the electric fund at council request.
The council’s acceptance means the audit report and the auditor’s management letter will be placed on record; any specific corrective actions will be considered by staff if follow‑up items arise. The council did not direct additional immediate action beyond asking staff and the auditor for clarifications on certain fund items.
