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Auditors give Olivia a clean 2025 opinion; officials hear reserve, debt and fund updates
Summary
An independent audit of the City of Olivia’s 2025 financial statements returned an unmodified (clean) opinion. Auditors highlighted modest internal-control concerns tied to small finance staffing, a general fund reserve near 30% (target 40%), and ongoing capital drawdowns tied to city hall and public safety projects.
Miranda Wentland, government partner at ABDO, told the Olivia City Council the firm issued an unmodified ("clean") opinion on the city's 2025 financial statements after completing risk-based testing and federal grant work. "We were able to successfully accomplish all of that. We've issued an unmodified opinion," Wentland said.
Wentland described two recurring internal-control observations: a small finance department that limits segregation of duties, and the audit firm’s role preparing the financial statements, which she said poses an inherent risk that management must oversee carefully. She also noted timing issues with certain invoices paid in 2026 that related to 2025 services; auditors proposed adjustments to reflect those costs in the correct year.
On key finances, Wentland said the city's general fund reserves have been roughly 30% of the next year's budget for three years, below the council's stated 40% target. The auditors reported the general fund's ending balance at about $875,000 after a roughly $46,000 increase during 2025. "One of the financial performance measures that we take a look at is the amount of reserves…we are looking for anywhere from 35 to 50%," Wentland said.
Auditors walked the council through other fund highlights: roughly $7.9 million in outstanding governmental bonds with a $3.9 million 2024B temporary issuance scheduled to be refinanced in 2026, healthy utility fund cash positions (water fund cash roughly $1.4 million; electric about $3.1 million), and a liquor fund reserve near $372,000. They also noted a planned drawdown of capital project funds related to city hall and public safety building work.
Council members praised staff for preparation and thanked the audit team. No compliance exceptions were reported from the legal-compliance review, and federal grant testing on the community facility loan and grant program revealed no noncompliance, Wentland said.
The auditor offered to follow up on specific technical questions and provided the council with slides that break down revenues, expenditures and long-term debt schedules; the presentation concluded without formal council action.
The council's next regular meeting will include routine follow-ups as needed.
