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External auditor outlines FY2026 audit scope and timeline, flags key audit risks
Summary
Sherry Amos of Clifton Larsen Allen presented the FY2026 audit scope to the Norfolk City Council, describing a risk-based approach that focuses on management override and revenue recognition and announcing a goal to complete reporting by the state's December 15 deadline; a councilmember pressed for timely completion given past delays.
Sherry Amos, a principal with Clifton Larsen Allen, told the Norfolk City Council at a work session that the firm's fiscal year 2026 audit will cover the city's financial statements, the Economic Development Authority, the Employees' Retirement System and the school district, with ancillary cash-basis and transmittal reports as required by Commonwealth audit specifications.
Amos said the audit follows generally accepted auditing standards and a risk-based approach: auditors will design procedures to address two required focal risks'management override of controls and revenue recognition'and will also report on internal control and significant deficiencies. She described a timeline that began with preliminary field work already underway, additional testing in July, more intensive year-end field work in September through November, and a target reporting date of December 15 to meet the Commonwealth's deadline.
"We're going to be expressing an audit opinion over the city's financial statements," Amos told the council, and she said the firm will also perform single-audit testing for major federal programs in coordination with the school system. She noted ancillary Commonwealth compliance testing and census-data testing for the Virginia Retirement System are part of the engagement.
Amos described planned changes to financial-statement presentation tied to recent accounting guidance, including additional narrative and budget-variance information intended to make financial statements more readable. She said management has begun implementing presentation changes and provided auditors with an outline to help CLA prepare for the new disclosures.
A councilmember pressed for improved timeliness, noting the city has previously struggled to deliver audits on schedule. "I really want to make sure that we're on top of that," the member said, urging management and staff to prevent repeated delays and complete the audit on time.
Amos said the firm would return to report final findings and communications in December and welcomed questions from the council.
