CLA: Marco Island’s financial statements receive clean opinion, auditors cite two material weaknesses in year‑end adjustments

The city’s independent auditors delivered what they described as “very, very good news” on the books while also flagging control problems the committee must fix.

At a July 9 Audit Advisory Committee meeting, CLA lead auditor Chris told members the City of Marco Island received an unmodified audit opinion for the year ended Sept. 30, 2025, and an unmodified single‑audit opinion on grant compliance. “Your financial statement audit opinion is unmodified,” he said, adding those are the “highest cleanest levels of opinion” auditors can issue.

Despite the clean opinion, CLA reported two material weaknesses, both tied to audit adjustments that were identified and corrected during the audit. The auditor said one bucket of findings related to grant accounting and another to other audit adjustments, including capital‑asset entries that were completed late in the year. “There are two material weaknesses that we have talked about throughout related to audit adjustments,” CLA said, noting that many entries were reclassifications or timing corrections rather than missing cash receipts or expenditures.

Committee members and staff probed causes. Members described repeatedly shifting target dates for closing the books — from March to April to May, then June 30 — and said a “drip” of information hampered auditors’ ability to complete work earlier. CLA said that when trial balances and contract reviews arrive late, the firm must reallocate staff and “shoehorn” the engagement into a moving schedule.

Marcia Solow, the city’s newly introduced finance leader, said she and new staff member Chase Calloway will prioritize aligning the year‑end close schedule, building reconciliations earlier in the fiscal cycle and improving communication with the auditor. “We already have a meeting scheduled with Chris and his team,” Solow said, describing a planned post‑audit review and internal finance team meetings to identify process fixes.

On remediation, CLA cautioned the committee that remediation is a work in progress: the city won’t know whether weaknesses are fully fixed until next year’s audit. “These are going to be a work in progress,” the auditor said. He added that the nature of the adjustments — many of which were corrected during audit procedures — meant the audited financial statements are accurate and that the material‑weakness designation reflects the existence of corrected audit adjustments, not that cash is missing.

Members asked whether the findings would threaten the city’s credit rating. CLA and staff said an unqualified opinion, low debt levels and the city’s fiscal profile make a rating impact unlikely as long as the city demonstrates commitment to corrective action.

The committee asked for clearer schedules and more proactive communications so council and the public are not surprised when audit milestones shift. Solow committed to follow‑up meetings with CLA and to recommending a revised timeline and staffing needs as she gains more experience in the role.

The committee scheduled a workshop with City Council for July 13 where CLA and staff will present the audit results in more detail and take additional questions. The committee also plans internal reviews in August to track corrective‑action progress.