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Shawnee adopts FY2026–27 budget; auditors report adverse opinion on a component unit and a material weakness
Summary
The City Commission adopted the FY2026–27 budget and five‑year CIP while auditors from Arledge reported an adverse opinion related to an omitted component‑unit audit (SCCDA) and a material weakness; staff said filings and corrective steps are in progress.
The Shawnee City Commission unanimously approved the fiscal year 2026–27 budget and a five‑year capital improvement plan on June 18, while auditors presented the city's FY2025 annual comprehensive financial report that included both an adverse opinion tied to a component unit and a material weakness.
"Yes, it does" include a reserve fund, Finance Director Kimberly Hoover told the commission when asked whether the proposed budget included the contingency savings the mayor had requested. After a motion and second, the commission approved the budget by voice vote (item carried 6‑0).
At the same meeting, Kenzie Duarte, CPA and partner at Arledge, presented the audited financial statements for the year ended June 30, 2025. Duarte said the firm issued an adverse opinion "in relation to the discretely presented component units" because the required audit for the Shawnee Civic and Cultural Development Authority (SCCDA) was not available. The remainder of the city's funds received unmodified opinions, she said.
Duarte also described an emphasis‑of‑matter related to the implementation of GASB Statement 101 (compensated absences) and identified a material weakness and a compliance finding tied to late filing: the city's financial statements and the federal single audit were not filed within the state and federal timelines (six and nine months, respectively), which generated a repeat finding on the single audit report.
Duarte summarized key figures: total net position increased by roughly $4.7 million from the prior year to about $139 million, and the city recorded approximately $5.4 million in federal expenditures during the year (about $4 million in ARPA funds), which were selected as a major program for testing.
City staff and the auditors noted management responses are included in the report and that several past findings are in progress or resolved. Commissioners asked for further discussion about component‑unit inclusion and the audit methodology; Duarte and staff indicated they would follow up.
The commission approved the budget and CIP without amendment; the audit findings were presented for information and will inform follow‑up governance and corrective actions, according to staff.
