Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Audit topic
No spam. Unsubscribe anytime.
Auditor presents FY2025 ACFR; single-audit compliance problems flagged for airport grants
Summary
Heinfeld Meech reported an unmodified opinion on the city’s FY2025 financial statements, but auditors cited repeat findings on accounting closeouts and IT access controls and issued modified federal compliance findings for airport-related grants because required SF reports were not filed on time.
Michael Lazan, audit partner with Heinfeld Meech, told the council that the city’s fiscal year 2025 Annual Comprehensive Financial Report (ACFR) received an unmodified opinion, indicating the financial statements are materially free from error. "The city received what's called an unmodified opinion," he said during the presentation.
Lazan outlined three repeat areas of concern: audit adjustments needed to close out and correctly report assets and liabilities; information-technology access and policy gaps; and capital-asset records (which improved from a prior-year material weakness to a significant deficiency). He also said a new GASB standard (GASB 101) affecting compensated-absence reporting required implementation for FY2025.
Because the city expended more than $750,000 in federal awards in FY2025, the audit required a single-audit schedule. Lazan said auditors tested major programs including the Airport Improvement Program (Assistance Listing 20.106) and the Small Community Air Service Development Program (20.930). For both programs auditors issued a modified compliance opinion because required federal reports (SF-270/SF-271/SF-425) were not completed and submitted on schedule.
Council members pressed auditors and staff about the origin and meaning of the findings. One council member raised a concern that missing federal reports could trigger repayment of about $750,000 and jeopardize future grants. Lazan responded that federal auditors typically allow corrective action and late filing and that the audit identified no questioned costs, but he cautioned that final federal decisions are made by federal auditors.
Staff said corrective-action plans and the single-audit package were submitted to the federal clearinghouse on March 31, and that some corrective steps (including assigning grant-reporting responsibility to city staff rather than contractors) are included in the planned budget and staffing changes.
Next steps: staff will monitor corrective-action timelines, work to close repeat findings before the next audit cycle, and propose staffing or budget changes to improve internal controls and timely grant reporting.
