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Independent audits show Kearney moving to modified cash basis, improved asset records and healthy reserves
Summary
A CPA from Trout & Beeman presented the independent audits for fiscal years ending March 31, 2023 and March 31, 2024, reporting the city moved to a modified cash basis, gained ownership of fixed asset records, addressed prior auditor issues, and ended the general fund with roughly six to seven months of reserves.
A representative from Trout & Beeman, who self‑identified in the meeting as Mike Roshuk, presented audit results for fiscal years ended March 31, 2023 and March 31, 2024. He described corrective steps taken after prior‑auditor turnover, including recovering and recording fixed asset records, converting to a modified cash basis for faster, more usable financial statements, and cleaning up prior‑period adjustments.
Roshuk told the board the city now reports debts and fixed assets on its modified cash statements, that 2023 and 2024 had no major budget violations, and that major funds had revenues over expenses. He cited the city's general fund reserves as sufficient to cover roughly "six to seven months" of operations, which he described as a comfortable middle‑range reserve level compared with other small municipalities. He also noted one prior issue in 2023 where a portion of deposits (about $300,000) exceeded FDIC coverage and was temporarily under‑collateralized; staff corrected that condition in 2024.
Why it matters: the audit represents a transition to more complete fiscal reporting and establishes a baseline for budget planning, debt and asset management. The board and staff discussed reserve policy, prior turnover, and the operational challenges that prompted the audit work.
Provenance: the CPA's presentation and board Q&A took place during the agenda's financial report segment.
