Howe accepts FY 2023–24 audit; auditors flag material weakness in controls

The Howe City Council unanimously accepted the FY2023–24 audit presented by Vail and Park PC. Susan Mopala, the engagement principal, told the council the firm issued an unmodified (clean) opinion on the financial statements but identified a material weakness related to internal controls over financial reporting and several significant deficiencies.

Mopala reported the city had a total net position of $2,755,912 as of Sept. 30, 2024, an increase of $33,006.73 from the prior year, and said property tax revenue rose by about $87,000. She told the council "we did issue an unmodified audit report on the financial statements," and recommended that the city implement written policies, improve cash reconciliations, separate restricted funds (for example municipal court and technology funds) from the general fund, and strengthen document retention practices to reduce audit adjustments.

The audit noted total expenses rose $674,948 (roughly 34%), driven primarily by public safety and personnel costs; the water fund showed negative unrestricted net position that the auditor said was being supported by the general fund. The audit included about 17 adjusting journal entries; the auditor said that number suggests the city’s closing process and internal controls need improvement. Council accepted the audit on a unanimous vote and the auditor encouraged leadership to prioritize timely completion of the FY25 audit this summer.