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Molalla audit gets clean opinion; GASB change reduces opening net position by about $900,000
Summary
Independent auditors gave the city an unmodified (clean) opinion for the year ending June 30, 2024, noted a GASB accounting change that lowered opening net position by about $900,000 for compensated-absence recognition, and flagged minor budget and posting issues; the city also disclosed a $33 million clean-water loan agreement.
An independent auditor on Feb. 11 told the Molalla City Council that the city received an unmodified (clean) opinion for the fiscal year ending June 30, 2024, but must disclose a change in accounting principles required by recently issued GASB standards.
Kathy Wilson, the auditor, said the city adopted GASB guidance on compensated absences, which required recognizing amounts expected to be taken as leave rather than only amounts payable at termination. That change resulted in a restatement that reduced the city’s beginning net position by about $900,000. "We have what is called an unmodified opinion. That's clean opinion," Wilson said.
The auditor noted the city’s general fund balance was about $2.9 million—approximately 38% of the prior year’s expenditures—within the commonly cited healthy range of 25%–50%. Footnotes discussed significant upcoming commitments and disclosed that the city entered into a loan agreement under the state clean water revolving fund for $33 million and had drawn about $800,000 as of the audit report.
Wilson also identified several minor compliance items in the state report: a single-day late posting of meeting publications (posted nine days before rather than ten) and presentation issues related to budget-line detail and contingency estimates. The auditor characterized those as minor and not material to the opinion.
Councilors thanked finance staff for preparing the financial statements and noted the audit and governance letter will be posted online for public review. Finance staff said the audit documents are already available on the city website under finance/audit documents.
No formal council action was required; the council received the audit and the governance letter.
