Auditors issue clean opinion, note restatement and minor internal-control recommendations

Presenter summarized the City of Moberly’s audited financial statements for the year ended June 30, 2020, and said the auditors issued an unmodified — or "clean" — opinion on those statements. The auditor noted a restatement (footnote 11) because several prior-year balances, chiefly utility deposits and related liabilities, were reestablished on the books.

The audit report described key year-over-year movements: governmental funds’ fund balances declined about $178,000 (roughly 2%); total revenues increased by about $711,000 — which the presenter attributed largely to Ameren solar rebates — and total expenditures rose by about $929,000, primarily tied to the city’s purchase of the Heritage Hills Golf Course. Utility (proprietary) fund net position improved, with total net position rising by about $581,000 overall and proprietary revenues up roughly $939,000, the presenter said.

The auditor told the council that the firm performed the procedures required to reach its opinion but that the scope of a financial-statement audit does not include an opinion on internal control. The presenter said, "we did not identify any material weaknesses in internal control," while also offering several best-practice recommendations. "We did include a few recommendations that are opportunities for the city to enhance its internal control," the presenter said.

Council members pressed staff and the auditor on specific items. Council member Kiser asked whether the city intended to change from modified-cash accounting to full accrual once a new accounting package is implemented; staff replied that GASB is moving toward full accrual for governmental entities but that conversion would require more staffing and effort, and that the city prefers to remain on the modified cash basis until required. On user-access controls, a staff representative said tighter controls will be available in the new Cassell software and the city is working to address current limitations. "There is a much more robust capacity in Cassell," staff said.

The audit team also reported fewer proposed audit adjustments than the previous year and no disagreements with management. The presenter closed by saying staff were cooperative and invited further questions after the meeting. The council did not take formal action on the audit report at this session; the item was informational and the meeting moved on to other agenda business.