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Auditor issues adverse opinion on Gervais 2023-24 statements, cites unreconciled cash
Summary
Independent auditors told the Gervais budget committee they issued an adverse opinion on the city 2023-24 financial statements because they could not verify year-end cash balances and monthly reconciliations.
Ryan Pascarella, the independent auditor from REDW, told the Gervais Budget Committee that the firm had issued an adverse opinion on the city 2023-24 financial statements because the audit team could not obtain sufficient evidence to support the reported year-end cash balance.
"I'm giving an adverse opinion on these financial statements," Pascarella said, explaining the firm could not reconcile outstanding withdrawals and deposits against the city's accounting records and bank activity. He described the core issue as an inability to tie the system's ending cash balances to bank statements and vendor-level detail, which prevented the audit team from obtaining confidence in the presented numbers.
Pascarella said the audit highlighted two material weaknesses: untimely bank reconciliations (which hampered verification of year-end cash) and budget compliance issues. He advised the committee that correcting monthly reconciliations and improving supporting documentation for bank activity were prerequisites to obtaining a clean (unmodified) opinion in subsequent years.
