Auditors give Jefferson City a clean opinion; accounting standard change drove prior-year restatements

Amanda Schultz, an audit partner at WilliamsKeepers, told the Jefferson City Council that the firm issued an unmodified (clean) opinion on the city's audited financial statements for the fiscal year ended Oct. 31, 2025. "We've provided an unmodified or a clean opinion on those financial statements," Schultz said, adding that users of the statements "can rely upon them."

The firm also performed a required single audit because the city expended more than $1 million in federal grant funds; "the city had federal expenditures of $10.9 million during the year," Schultz said. WilliamsKeepers issued the additional single-audit reports with no findings of material noncompliance and expressed clean opinions on compliance testing.

City officials and the auditor discussed a restatement to prior-year balances tied to new accounting guidance. Schultz said implementation of the GASB standard on compensated absences (referred to in the summary report) changed how the city recognizes leave liabilities: "the standard requires us to recognize a liability for sick leave that is earned and is more likely than not to be used during an employee's term of employment," she said, adding that the change increased the liability and prompted restatements to prior-year figures. When Councilman Allers asked how the liability is calculated, Schultz replied the historical liability focused on accrued vacation and termination payouts but "now it's picking up all leave available to employees that they've earned that they can carry forward and use while they're employed by the city."

Schultz said the audit team did not identify any transactions they considered unusual or significant beyond that standard implementation, and they reported no disagreements with management. The auditor's communication letter noted no material weaknesses in internal control based on limited procedures, and the auditors thanked the finance staff for their cooperation.

Director of Finance Miss Perry followed the audit presentation with a financial update. She said year-to-date sales-tax receipts for FY26 were above projections (general sales tax $457,000 above projection; capital/park sales $217,000 above; safety tax $101,000 above) and that the revenue model currently projects just over $1.1 million more in revenues than budgeted. "Right now everything seems to be on track," she said, while warning that some figures (timing of collections, reappropriations and unspent budget items) still affect the year-end balance.

Perry said the projected FY26 ending general fund balance is about 15.18 percent, under the city's 17 percent policy, but cautioned that additional revenue collections or unspent appropriations could raise that percentage later in the year. On benefit funds, Perry reported an estimated $1.8 million cash balance in the self-funded health-insurance account and said unsettled workers-compensation claims may require a supplemental appropriation to meet statutory minimums.

The council took no formal action on the audit beyond receiving the report; the full audited financial statements and single-audit schedules were available to council and the public.