Auditor: DeForest CDA financial statements receive clean opinion; 2025 net income rose after property sale

Justin Hoglund, principal at Baker Tilly, told the DeForest Community Development Authority on July 9 that Baker Tilly issued an unmodified — or "clean" — opinion on the CDA's 2025 financial statements, meaning the firm did not identify material misstatements. "We do give, what's called a, unmodified or a clean opinion on your financials," Hoglund said during his presentation.

Hoglund walked the board through a high-level balance sheet and flagged a major swing in net position: the CDA moved from a large negative position the prior year to a large positive position in 2025. He attributed the change to $3,500,000 in non-operating revenue and reported a 2025 net income of about $2,800,000. "The first was the Yahara River LLC fund that sold…which resulted in a gain of I think it was, like, over 1,500,000," Hoglund said, and he also cited redevelopment-fund revenue arising from village donations tied to the Yahara River Crossing mixed-use project.

Commission members pressed Hoglund about a recurring audit finding described as a "material weakness over financial reporting." One commissioner asked, "Am I understanding correctly that that is because you are helping prepare the financials and auditing?" Hoglund confirmed that the finding arises when the auditor prepares the entity's financial statements and explained the practical reasons the firm often prepares statements for smaller governments: it is more efficient, the firm has the required software and expertise, and the village reviews and accepts the statements. "Just because we prepare your financials, that's the only reason that it is," he said.

Hoglund and staff said the finding is common for many clients — particularly smaller jurisdictions — and that the village/CDA reviews the draft statements before signing them. Board members debated whether an independent preparer would be feasible; Hoglund said only very large jurisdictions typically prepare their own statements in-house. The discussion concluded without immediate policy changes.

The presentation also included a reporting-and-insights document the auditors said is meant to inform those charged with governance of relevant accounting matters and regulatory updates. Hoglund provided his contact information for follow-up questions and encouraged the board to consult the report's guidance pages.

Next steps: the CDA acknowledged the audit presentation and moved on to other agenda items; no formal changes to accounting practice were adopted at the meeting.