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Independent auditors give Crisfield a clean opinion but note repeat material weakness
Summary
PKS issued an unmodified (clean) opinion on Crisfield's FY2025 financial statements but identified a repeat material weakness tied to the municipality not employing a CPA for statement preparation; auditors also reported no compliance findings for ARPA testing.
External auditors PKS presented the City of Crisfield's FY2025 audit at the Feb. 11 council meeting and issued an unmodified (clean) opinion on the financial statements.
Andy Haney, partner in charge of the audit, said PKS gave the highest level of assurance on the basic financial statements. Lisa Ravel, who presented financial highlights, said the auditors found one repeated material weakness related to the city not having a certified public accountant prepare the statements; that weakness is common among small municipalities, the auditors said, and the firm noted it as a repeat item. The audit's government-auditing standards report and uniform guidance report found no instances of noncompliance for the major federal program (ARPA) that the auditors tested; the city reported about $1.3 million in federal spending in FY2025.
Key figures cited by the auditors included general-fund revenues of about $4.5 million and expenditures of about $5.3 million (a revenue-under-expenditures position of roughly $102,000). Auditors explained revenue timing related to grant recognition (ARPA funds are recognized when spent, not when received), and identified a fund-balance total of approximately $209,000 for the general fund at year end. In enterprise funds (primarily water and sewer), auditors reported operating revenues of roughly $3.0 million and a total net position of about $11.6 million; the enterprise fund had an unrestricted deficit that improved from the prior year.
Auditors also discussed GASB accounting changes (compensated-absences recognition under GASB 101), which increased the city's recorded liabilities (auditors cited roughly $203,000 for compensated absences across funds). Staff and auditors discussed options to improve internal controls and financial reporting practices. The council thanked the audit team and recognized staff for cooperation.
The auditors provided the council with an audited communication packet that includes management letters and the list of journal entries recorded for FY2025. Staff said they will finalize and file the audit package according to municipal procedures.
