Fremont council receives clean audit, notes accounting change for compensated absences

The City of Fremont received an unmodified audit opinion for the fiscal year ending Sept. 30, 2025, while auditors and staff told the council a new accounting standard required an adjustment related to compensated absences.

"We issued a clean, unmodified opinion on the financial statements," Colby of Forvis Mazars said in remarks to the council, adding the firm included an emphasis-of-matter paragraph to call attention to GASB Statement No. 101 and its impact on reported compensated leave. Finance Director Jennifer Nabb said the city applied the new guidance and recorded the adjustment in the financial statements.

Auditors also reported a clean compliance opinion for major federal award programs. The Corona State and Local Fiscal Recovery Funds accounted for roughly $3.1 million of audited federal expenditures, which the auditor said was about 78% of the city's federal spending subject to single-audit rules.

Council members asked for clarification about an item described in the audit as a $938,876 misstatement. "That is truly a misstatement between the classification of what's being reported as city funds versus utility funds," Colby said, explaining the amount reflects internal service fund allocations for employee benefits rather than missing cash.

Nabb told council members the city deliberately used reserves in FY25 and that leadership expects reduced flexibility going forward as previously committed capital and one-time funds are drawn down. She noted city bond ratings remained AA on the governmental side and double-A minus on the utilities.

After public comment closed (none), Councilman Horner moved to receive the audited financial statements for the fiscal year ending Sept. 30, 2025; Councilman Johnson seconded and the motion carried 8–0.

The council will post the full audit report and the 81‑page financial statements on the city's website for public review.