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Audit: Seward posts unmodified opinion but finds utility-billing control gap
Summary
An independent audit of Seward’s FY2025 financial statements gave an unmodified opinion but identified a significant deficiency: one local business was not charged for about 18 months because of utility-billing control gaps. Management has a corrective-action plan to be tested next year.
Grant Scott, an audit partner with Altman Rogers & Company, presented the city’s fiscal-year 2025 audit at the July 13 Seward City Council meeting, saying the financial statements "present fairly in all material respects" but noting one significant deficiency in internal controls over utility billing.
Scott told the council auditors sampled 40 transactions across control areas and found that one local business was not billed for roughly 18 months; management discovered the omission in June 2025, Scott said. That error produced a reportable internal-controls deficiency and is documented in the audit’s compliance section and management’s corrective-action plan.
The auditor summarized key financial figures: combined net position across governmental and business-type activities of roughly $55.4 million, a governmental unassigned fund balance of about $9.6 million, and increases in cash and investments year over year. Revenues outperformed the final budget by about $2.2 million, Scott said, while expenditures were over budget by about $400,000. Electric and other enterprise funds showed year-to-year variances tied to capital projects.
Scott said the city was below federal and state single-audit thresholds for FY2025 but will be subject to a federal single audit in 2026 because of grant activity related to the Short Power project and possibly a state single audit based on new information. He praised the finance department for meeting the six-month GFOA submission deadline and for improving timeliness compared with prior years.
Mayor Sue McClure and council members thanked the finance team. The audit includes a corrective-action plan; Scott said auditors will retest internal controls over utility billing next year to confirm whether the deficiency has been resolved.
The council packet includes the full annual comprehensive financial report and the auditor’s independent report; Scott noted management’s responses and recommended testing of corrective steps in the FY2026 audit cycle.
