City accepts FY2025 audit showing unmodified opinion and strong fund balances

The City of Katy accepted its fiscal year 2025 financial statement audit and federal single audit during its June 8 council meeting after city auditors reported a clean set of results.

Lupi Garcia, presenting audit findings, said the auditors were able to express an unmodified opinion on the city's financial statements and that the audit did not identify significant deficiencies, material weaknesses, or material noncompliance for the major federal program tested (Community Development Block Grant). Garcia said the city’s government-wide net position was $273,800,000, total assets and deferred outflows were about $320.4 million, and the general fund ended the year with $42.1 million in fund balance (about $41.0 million unassigned).

Garcia explained liabilities decreased from the prior year, driven by scheduled principal payments and a decline in net pension liability. She also summarized fund balances across capital projects, debt service and grant funds and reported that no disagreements with management arose during the audit.

Council member Johnston Dietz moved to accept the audit and Mayor Dusty Thill called for the vote; the motion carried.

Why it matters: An unmodified (clean) opinion signals that the city’s financial statements are materially accurate under generally accepted accounting principles. The reported strong unassigned general-fund balance—about 80% of recent annual budgeted expenditures—provides fiscal flexibility for the city’s priorities and capital projects.

Next steps: Acceptance places the audit on the public record and allows staff to use audited figures in upcoming budget and financial planning work.