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Fremont council receives clean audit for FY2025, flags accounting change on compensated absences
Summary
Auditors gave Fremont an unmodified opinion on the FY2025 financial statements but included an ‘‘emphasis of matter’’ about implementing GASB guidance on compensated absences; council voted 8–0 to receive the report and was briefed on reserves, fund balances and federal grant spending.
The Fremont City Council on April 14 received the city’s audited financial statements for the fiscal year ending Sept. 30, 2025, after auditors issued an unmodified (clean) opinion while calling attention to a new accounting standard on compensated absences.
Colby, director of audit with Forbes Mazars, told the council the firm issued a clean opinion but included an emphasis-of-matter paragraph related to GASB Statement 101 on compensated absences, which required the city to adjust prior reporting to meet the new standard. “They ultimately determined that there were some changes that needed to be made in order to comply with that standard, and so there was an adjustment to the financial statements to properly implement that standard,” Colby said.
Finance Director Jennifer Knapp said the audited statements will be posted on the city website and walked the council through key lines: a roughly $3.3 million increase in year‑over‑year expenses (largely people costs and contractual services), planned use of reserves and the city’s committed capital program of about $7.6 million next fiscal year for projects including a police station and code enforcement. Knapp added the city expended about $3.1 million of federal Coronavirus State and Local Fiscal Recovery Funds during FY2025 and that the single‑audit compliance opinion for that major federal award was unmodified.
Council members questioned a classification item that appeared as an approximately $938,876 ‘‘misstatement’’ on a particular schedule. Colby explained the amount reflected a reporting classification between city and utility units — primarily the internal service fund allocation — not missing money. “There is no missing million dollars or $980,000. It’s just a classification standpoint between those reporting units,” Colby said.
The audit report also noted the city’s utility‑to‑city contribution (6.25% of certain utility billings, roughly $4.6 million reported) and a $21 million bond issuance reflected in cash balances at year‑end; Knapp said some bond proceeds had not yet been spent and that fund balances are restricted or committed for specific uses under state law.
After the presentation and a brief public‑comment period (none), Alderman Horner moved to receive the audited financial statements for the fiscal year ending Sept. 30, 2025; the motion was seconded and carried 8–0.
The council received no internal‑control deficiency findings and the auditor said there were recommended best‑practice comments; Knapp thanked staff and outside auditors for completing the work. The finance director said the report represents a moment in time and that the city will continue rate studies and fiscal planning as costs rise.
