Auditors issue clean opinions on Clearwater city and CRA audits; limited control findings flagged

External auditors reported unmodified (clean) opinions on the City of Clearwater and Community Redevelopment Agency FY2025 financial statements during the June 15 meeting, but they also highlighted a small number of accounting and internal control items that city leaders must address.

Lauren Stro, audit partner at Cherry Beckert, presented both audits and the single‑audit results. For the CRA audit, Stro reported a clean opinion on the financial statements and noted that the CRA began issuing separately audited financial statements in FY2020. The audit identified one material weakness connected to a donated asset that was recorded in the prior year (2024) but not reflected in the CRA’s financial records until corrected; management restated net position to correct that error.

Stro said the city audit likewise earned unmodified opinions on the financial statements and on federal/state single audits, but the team reported one significant deficiency arising from amounts recorded for FEMA reimbursements that were later covered by an insurance settlement and therefore should not have been recorded the same way. The auditors reported no uncorrected misstatements that materially affected the financial statements and said disclosures were neutral and consistent. Stro told council there were no disagreements with management and no indications of fraud discovered in the audit work.

Council accepted the audit reports and thanked auditors and staff for their work. Auditors also reminded council of upcoming accounting‑standards changes (GASB) that staff will implement in future reporting.

What to watch for: staff work to remediate internal control findings, confirm corrective entries, and update disclosures as needed. Auditors advised management on compliance procedures tied to the Community Redevelopment Act and other state rules.

"We issued unmodified opinions—that’s the highest level of assurance you want—but we did identify a limited number of matters that warrant attention from governance," Lauren Stro said.