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City auditor gives Muskego an unmodified opinion, flags bookkeeping alignments and policy suggestions
Summary
The Finance Committee received a 2025 audit from Hawkins Ash that delivered an unmodified opinion and reported increases in several funds; auditors recommended fixes to fund balance descriptions, interest allocation, and a capital asset policy, and said the final report will be issued by week's end.
Amber Ebert, lead auditor from Hawkins Ash, told the Muskego City Finance Committee that the draft 2025 financial statements received an "unmodified audit opinion," the firm's strongest opinion. She said the general fund increased by about $717,000 from the prior year, the landfill fund rose about $704,000, and the debt service fund increased roughly $735,000. Proprietary funds also grew: water revenues/net position rose about $1.3 million and sewer about $1.1 million.
"We issued an unmodified audit opinion, which is the best opinion for an audit," Ebert said, adding that there were no findings of noncompliance and that overall the year was "very, very smooth" for a first-year audit engagement. She reported 19 journal entries were recorded during the audit process and that four exceeded Hawkins Ash's materiality threshold.
The auditor identified two recurring significant deficiencies (preparation of financial statements and significant audit adjustments) but said they were not material weaknesses. Ebert recommended several management advisory changes, including aligning the city's fund balance descriptions with GASB 54, ensuring published budget amounts match financial software, allocating interest income for pooled cash accounts, and adopting a formal capital asset capitalization policy. She also noted an upcoming GASB reporting-model change (GASB 103) that the city should plan to address in next year's financials.
Alderperson Wolf and Alderman Schrader pressed for specifics on the material adjustments; Ebert pointed to Appendix A in the draft report and identified entries 39, 41, 44 and 45 as the adjustments she considered material to their threshold, explaining most were reclassifications to align with state reporting preferences rather than corrections of missing funds.
Ebert said the draft would be finalized within days: "We'll get everything wrapped up tomorrow and then our admins usually take a day or two to get everything finalized," and expected the city to receive the final documents by the end of the week. The committee did not take any formal action on the audit during the meeting; members were invited to follow up with the auditor directly if they had further questions.
The audit presentation was the primary substantive item at the meeting; next procedural steps are issuance of the final audit documents and staff implementation of the recommended bookkeeping and policy adjustments.
