Audit committee receives clean opinion but asks for fund-balance and presentation clarifications before sending audit to council

Ron Stewart, partner at Gilbert Stewart CPAs, delivered the firms fiscal year 2025 audit to the North Ogden City Audit Committee on March 26 and told the panel the firms testing supports an unmodified ("clean") opinion. "In our opinion the financial statements . . . present fairly in all material respects," Stewart said during his review of confirmations, invoice testing and analytical procedures.

The auditor said the audit produced one procedural finding: the citys fraud risk assessment had not been presented to a city council meeting as required. Stewart recommended adding that presentation to the council or budget schedule so the assessment is on record before the next audit cycle.

Committee members used the auditors presentation to press staff for clarifications on several presentation and accounting items. They asked for the calculation used to determine the states 35% limit on unrestricted general-fund balance, noting the statute requires excluding certain internal reimbursements; the auditor said he would provide the detailed computation. Members also flagged a roughly $400,000 drop shown in the statement line labeled "property taxes" and asked staff to explain whether account grouping or a reporting aggregation produced that variance.

The committee raised a separate but related presentation question about a roughly $1.595 million net increase in the general-fund balance for the year. Staff explained that timing of transfers and a late-captured state property-tax amount were major contributors and agreed to provide a line-by-line reconciliation so councilors can see which items drove the swing.

After discussion, the committee voted to recommend the audit be forwarded to the City Council with the condition that staff and the auditors provide written answers and supporting schedules addressing the questions raised (35% fund-balance calculation, the property-tax presentation variance and the excess general-fund balance). The voice vote was recorded as unanimous.

The auditor told the committee he will deliver the requested support schedules and the fund-balance calculation; the committee scheduled a follow-up agenda and penciled a July 16 meeting to review the additional materials before or concurrent with the City Council presentation.

What this means: the audit opinion itself is clean and the auditors found no material misstatements in the financial statements, but the committee requested additional explanation and supporting workpapers so council members and the public can easily reconcile the MD&A and financial-statement totals to underlying transactions. The auditor also recommended that the fraud risk assessment be presented in a council meeting going forward.