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Berlin council accepts 2025 audit; auditors flag material-count adjustment and control deficiencies
Summary
Kerber Rose presented an unmodified opinion on Berlins 2025 financial statements and highlighted a material-count adjustment tied to a software conversion, two significant deficiencies (financial reporting and segregation of duties), and recommendations on bank consolidation and software setup.
Dave Lynch, government audit shareholder with Kerber Rose, told the Berlin Common Council that the firm issued an unmodified (clean) opinion on the citys 2025 financial statements, saying the statements "present fairly, in all material respects" as of Dec. 31, 2025. Lynch described the opinion as the highest level of assurance auditors provide.
Lynch walked the council through key figures from the annual financial report: total governmental funds were about $9,600,000 and the general funds unassigned fund balance stood near $3,790,000, which he said equated to roughly 65% of current-year expenditures. He highlighted an ambulance fund balance of about $474,000 and reported that the general fund increased about $245,000 during 2025. On proprietary funds, Lynch said the water utility produced operating income of about $173,000 while the sewer utility had an operating loss of about $35,000.
The audit footnotes and management communication letter flagged several control items. Lynch said auditors posted a prior-period material-count adjustment, a finding the firm classified as a material weakness tied to the citys conversion to new accounting software and related beginning-balance entries. He also described two significant deficiencies: a financial-reporting finding common to entities that rely on auditors to assist with report preparation, and a segregation-of-duties finding driven by a limited finance staff.
Lynch recommended practical steps for staff and council, including consolidating bank accounts to reduce monthly reconciliations, improving software setup and training, and carefully documenting budget-to-actual classifications so activity belongs in the correct funds (for example, reclassifying some items out of the general fund into TIDs or other special-revenue funds).
Council members praised staff for moving the audit forward more smoothly than in prior years. After discussion, the council moved and voted to accept the 2025 audit; the motion was recorded as passed.
