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Auditors issue 'clean' opinion but flag $600,000 budget shortfall in Peekskill's general fund
Summary
PKF O'Connor Davies gave the city an unmodified (clean) opinion on its 2025 financial statements but auditors reported a roughly $600,000 unfavorable variance to budget driven by lower tax, sales and departmental revenues and noted a combined fund balance decrease of about $1.575 million.
The city received an unmodified audit opinion for fiscal year 2025, auditors told the Peekskill Common Council. Jeff Shaver, partner at PKF O'Connor Davies, said the firm "issued what's known as an unmodified opinion on the financial statements," a designation auditors sometimes call a "clean" opinion.
Shaver walked the council through the numbers: actual general‑fund revenues were $51,841,000 compared with a final budget of $54,542,000 (about $3.3 million less than anticipated). Expenditures were roughly $2.6 million under the final budget, leaving a net unfavorable variance against the adopted plan of about $600,000. When combined with the planned use of fund balance, staff and the auditors calculated a decrease in fund balance of roughly $1,575,000 for the year.
Shaver identified the key drivers: under‑collection of property taxes (about $664,000), a sales‑tax shortfall in the non‑property category (about $320,000), a shortfall in the new cannabis tax (about $400,000), departmental charges down roughly $600,000, and state aid (CHIPS) under by about $458,000. He also noted underspending in public safety, transportation and employee benefits that partially offset revenue shortfalls.
The auditors reported no material weaknesses in internal control and said they found no fraud to report. City staff and council members thanked the comptroller's office and department heads for keeping expenditures in check and discussed options to increase revenues and monitor restricted fund balances.
