Auditors give Decatur a clean opinion on FY2025 financial statements; one significant deficiency noted

City officials and outside auditors told the Decatur City Commission on Jan. 20 that the city’s FY2025 financial statements earned an unmodified—or “clean”—opinion, while auditors flagged a significant deficiency tied to a prior-year capitalization error.

Russ Madison, the city’s finance director, opened the presentation by summarizing the ACFR and pointing to strong permit and construction activity, rising property values and a healthy general fund balance. He said the city’s retirement plan funded ratio rose to about 88.7% and that the city’s conservative revenue and aggressive expenditure estimates helped deliver positive results for the year.

"We actually added to the net position $20,000,000 since the prior year," Madison said, noting that some apparent negative net position is driven by the city carrying school debt without related assets and recognition of other post-employment benefit liabilities.

Ryan Jones, a partner with Malman Jenkins, told commissioners the audit followed professional standards and that auditors obtained reasonable—not absolute—assurance. "Our opinions for the city's financial statements are unmodified," Jones said. "That is a clean opinion, and it's the highest level of assurance that a CPA firm can provide on a set of financial statements."

Jones described one finding the auditors considered a significant deficiency, not a material weakness: construction costs of about $438,100 were capitalized in a prior year even though the work and ultimate asset ownership belonged to another entity (the Decatur Housing Authority in this case). Auditors and city staff agreed the item did not meet the threshold for restatement, but it required adjustment and closer procedures going forward.

Auditors also reported a single minor purchase-card control exception: one of 25 tested transactions lacked documented approval (about $352). On federal compliance, auditors said the city had no findings for the two major programs tested under the single-audit: the South Housing Village program and ARPA funds.

City staff said they accept the finding and will tighten review of intergovernmental agreements and capitalization decisions. The ACFR and required supplementary materials are available on the city’s website for review.

What's next: auditors recommended periodic cybersecurity assessments and continued attention to GASB changes that will affect presentation in the FY2026 statements.