City auditors give Pittsburg an unmodified opinion, flag three findings including a federal-compliance issue

Matt Dyches of the city's auditing firm (formerly BT & Co.) told the City Commission the 2025 financial statements are "presented fairly in all material respects" and that the firm issued an unmodified audit opinion, the highest-level assurance an audit can provide. He walked commissioners through the audit scope, the test-based procedures used and the areas where management makes significant estimates, naming OPEB liabilities, net pension liabilities, lease-related inflows/outflows and accrued compensated absences as examples.

Trey Shelton, the engagement manager, presented results of the single audit for federal awards. He said the city's three major federal programs for 2025 were the housing voucher cluster, the Clean Water State Revolving Fund, and the Coronavirus State and Local Fiscal Recovery Funds. Those programs together accounted for about $20.1 million of the roughly $21.5 million in federal expenditures the auditors tested. Shelton reported an unmodified compliance opinion overall but listed three findings the auditors considered material weaknesses: two tied to internal control and financial-statement adjustments and one in the single-audit related to suspension-and-debarment compliance for the coronavirus funds. He said the schedule of findings and corrective-action plans are in the audit packet and staff has begun implementing remedies.

Commissioners asked how auditors determine what counts as a "significant" finding. Dyches said that determination is driven by professional materiality thresholds and risk-based sampling; multiple materiality measures are set depending on the fund and the nature of transactions. He said auditors perform more extensive, higher-level testing in areas judged higher-risk (for example, federal expenditures, capital additions and management estimates) and use confirmations and third-party evidence where possible.

Commissioner-level questions also touched on credit-card testing and internal controls. Dyches described a controlled deficiency (communicated to management) that resulted from testing of credit-card procedures; he said management updated the policy and compensating controls and the auditors classified it as a controlled deficiency rather than a formal written finding in the audit report. Shelton emphasized the city already has corrective-action plans for the single-audit finding and staff will report back to the commission as those plans are implemented.

The presentation concluded with auditors encouraging commissioners to review the management representation letter and the attached audit adjustments, including one uncorrected misstatement deemed immaterial. The commission thanked auditors and wished Stacy Hammond (the partner who led the audit but was absent due to surgery) a speedy recovery. The auditors said they would be available for follow-up and to present more detail on corrective actions if commissioners desired.