Council accepts 2025 audit; auditor flags material weakness tied to $36,000 capital item

The City Council of Cherry Hills Village on June 16 accepted the 2025 audited financial statements and heard from the City’s auditor, Paul Niedermuller of CLA, who said the audit produced "a clean, unmodified opinion, the highest standard available under audit standards." Finance Director Kelly Newman introduced the auditor and confirmed the engagement included both audit and non-audit services that management oversaw.

Mr. Niedermuller identified one material weakness and one significant deficiency. He said the material weakness involved a capital asset addition mistakenly expensed in the prior year; "The item involved $36,000," he said, and the amount was corrected as a prior-period adjustment during the current audit. The auditor explained the internal-control finding is material from a federal funding perspective because it affects the threshold for single-audit requirements if federal funding exceeds $1,000,000. Councilors asked whether the capital-asset classification would need remediation before the next audit; Mr. Niedermuller said his firm will verify corrective actions in the following year.

Councilors also questioned the governance framework for non-audit services performed by the audit firm. Councilor Dave Heller noted private-sector practice typically requires explicit approval for such engagements; Mr. Niedermuller replied that public-sector standards require communication through an engagement letter and that management must take responsibility for oversight. Councilor Susan Maguire moved to approve the audit; Councilor Karen Fisher seconded, and the motion passed unanimously.