Finance committee recommends council accept 2025 audit; auditor issues clean opinion, flags journal-entry controls

Andrea Jansen, principal with Baker Tilly, told the Stoughton Finance Committee on June 23 that auditors issued an unmodified — or "clean" — opinion on the city's 2025 financial statements and highlighted several communication items and internal-control findings.

Jansen said the independent auditor's report appears at the front of the financial statements and that the firm also provided a "reporting and insights" document with required communications and forward-looking notes for the 2026 audit. She described the overall general fund balance at year-end as about $7.1 million, an increase of roughly $530,000 from 2024, with unassigned fund balance of about $4.1 million.

The auditor identified two matters as material weaknesses for disclosure: a material adjustment related to storm-water capital and weaker controls over journal entries, which Jansen tied primarily to a small set of entries posted shortly before the audit. "If it's possible to have a second set of eyes on those specific journal entries, I think that would help," Jansen said, recommending review processes or a monthly pre‑audit review when timing permits.

Committee members pressed for context on how typical those control issues are for municipalities this size; Jansen said the findings are common for small staffs and do not, by themselves, undermine the clean audit opinion. She also walked members through debt metrics: total general obligation debt outstanding was about $53.4 million, roughly half of the state's statutory limit, and the city’s debt‑service ratio rose modestly in 2025.

Following the presentation and questions, Lisa moved and Brenda seconded a resolution to acknowledge receipt of the 2025 audit and recommend acceptance to the full council; the committee voted in favor and will forward the item to council for formal acceptance.

The auditors and staff noted additional materials in the packet, including budget-to-actual comparisons and further detail on fund‑balance components. The committee was advised that if it wanted to reduce unassigned fund balance to policy levels it could earmark additional assignments or consider spending in future budgets. The committee asked staff to continue monitoring the control items and to consider implementing the additional pre‑audit review steps suggested by the auditors.