City audit: Fort Atkinson gets clean opinion for city statements but auditors flag missing historical-society data

Andrea Jansen, principal at audit firm Baker Tilly, told the Fort Atkinson City Council on June 2 that auditors issued an adverse opinion on missing information from the Fort Atkinson Historical Society — a separate legal entity that meets the criteria for reporting as a component unit but was not audited — yet issued an unmodified ("clean") opinion on the city's presented financial statements.

The finding was the headline of Jansen's presentation of the city's financial statements for the year ended Dec. 31, 2025. "We issue an adverse opinion on missing information for the Fort Atkinson Historical Society," she told the council, explaining that because that entity's records were not available to auditors, they could not include them in the city's statements.

City financials otherwise looked strong, Jansen said. Total general fund balance stood at just over $11.1 million at year-end, up nearly $1 million from the prior year, with an unassigned fund balance of about $8.4 million. Jansen said the unassigned balance represented roughly 80.4% of budgeted general-fund expenditures — well above the city's policy range top end of 30% — and gave the council flexibility for capital planning or other assignments.

"For all of the information that is presented, we're able to issue an unmodified opinion," Jansen said, characterizing that as the highest level of assurance the auditors can provide.

On debt and utilities, auditors and staff reported no immediate concerns. General-obligation debt totaled just under $29 million at year-end and remained within the state's statutory limit and the city's policy limits. Jansen noted the city's debt-service ratio was stable at about 13.8% and that utility funds showed generally healthy operating results: the water utility produced approximately $1.5 million in operating income and had about $1.5 million in unrestricted cash reserves, while the sewer utility had roughly $360,000 in operating income and about $4.3 million in reserves.

The stormwater fund showed smaller operating margins and, Jansen said, had no unrestricted cash reserves at year-end. She told council members that a prudent target for cash reserves depends on local preferences but suggested a minimum of about four months of operating reserves would provide a cushion. "Probably at a minimum I would say maybe four months," she said in response to council questions about appropriate months-on-hand.

Jansen also pointed to internal-control matters and required communications in the audit reporting document; she described those as common for governments of Fort Atkinson's size and said they are intended to inform the council about potential higher-risk areas rather than require immediate remediation.

The council received the audit presentation and had follow-up exchanges with Jansen about reserve targets for the stormwater fund and how the city might apply the unexpectedly strong results to capital planning in 2027.