Finance Committee: Audit Results for FY Ending 2025 – March 16, 2026
Finance Committee Meeting: Audit Results for FY Ending 2025 – March 16, 2026
The Finance Committee, joined by Councillors Hudson, Reich, Moore, Nave, Jones Rouser, and representatives from the Bonadio Group, held a meeting on March 16, 2026, to review the independent audit results for the fiscal year ending June 30, 2025. The Bonadio Group presented a clean (unmodified) audit opinion, but noted internal control deficiencies and a modified opinion on a federal housing program. The meeting focused on the city's financial health, audit findings, and recommendations for improvement.
Discussion Items
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Audit Scope & Opinion: Greg Evans of Bonadio Group stated the audit covered the city’s financial statements, federal awards (single audit), and New York State DOT expenditures. The opinion was unmodified (clean), the highest assurance. However, the audit was delayed about one month beyond the January 31 target due to delays in the CIFA (federal awards expenditure) process. The Bonadio team spent approximately 900 hours on the audit. The city’s Bureau of Accounts is currently down one person, and filling positions is critical to meeting future deadlines.
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Internal Control Findings: Jacob Skebbell detailed five findings:
- Capital projects (material weakness, repeat from prior year): Manual tracking of revenue and receivables led to misstatements. The city needs to improve recognition of earned revenue from advances.
- Grant management (significant deficiency, prior year repeat): Delays in claiming expenditures, especially for state DOT programs (CHIPS). In FY2025, of $36 million in expenditures, only $30 million had been claimed. The committee discussed centralized grants management.
- Procurement process (significant deficiency, prior year repeat): Lack of documentation for waiving competitive bidding (e.g., sole-source justifications). Councilor noted concerns about non-competitive bids.
- SURA (Urban Renewal Agency) payroll documentation (new finding): In a sample of 23 new hires, documentation issues included missing coding to SURA (8 of 23), missing pay rates (5 of 23), and partial forms (2 of 23).
- HUD HOME program (modified opinion for special tests): The city failed to have a process for monitoring and inspecting rental units by June 30, 2025. This is a repeat finding from the prior year.
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Financial Highlights: Greg Evans presented the Gen Fund results. The city budgeted to use $19 million of fund balance but instead increased it by $1.7 million, producing a $20 million surplus. Drivers included $8 million revenue surplus (mainly unbudgeted ARPA funds) and $12 million expenditure savings (unfilled positions, DPW equipment maintenance, assessment department under budget). Water and sewer funds had profits of $3.7 million and $2 million, respectively. The unrestricted deficit was $710 million, driven entirely by retiree health liabilities (the state prohibits pre-funding). The unassigned fund balance reached $114 million (about 50% of annual expenditures)—historically high, largely due to ARPA and elevated interest income.
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Revenue/Expenditure Details: A line-by-line budget vs. actual review showed property tax revenue $64M budget vs. $59M actual; sales tax $123M budget vs. $121M actual (noted as declining); departmental revenues, licenses permits, and federal/state aid (including ARPA) exceeded budget; interest income $11.9M vs. $11M budgeted. Expenditures: General government $59.2M budget vs. $56.8M actual; public safety $187M vs. $182M; transportation $28.3M vs. $23.5M; home/community services $17.2M vs. $18.5M (overspent).
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GASB Implementation: GASB 101 (compensated absences) was implemented, increasing long-term liability. GASB 103 (financial reporting model) will take effect next year, affecting presentation but not bottom-line numbers.
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Questions on Fund Balance, Debt, and Self-Insurance: Councillors discussed the high fund balance and credit rating concerns. Greg Evans recommended using the balance for one-time expenditures rather than ongoing programs, spread over 5 years. He also noted that ARPA funding is essentially gone, and federal HUD funding is uncertain. On debt, total bonded debt decreased from $483.7M to $451.2M (6.7% decrease). The city's debt limit at fiscal year end was $623.4M. Self-insurance costs (especially retiree health) are increasing annually, with health care cost inflation around 10% per year.
Key Outcomes
- No formal votes or decisions were taken; the meeting was informational and for committee oversight. The committee received the audit report and discussed findings with the Bonadio Group.
- The audit findings will require management responses and corrective actions, especially on internal controls and federal compliance. The committee noted the need to fill Bureau of Accounts vacancies and improve grant management timing.
- Next steps: The city will work to implement the recommendations from the management letter and address findings before the next audit.
Meeting Transcript
This is a uh meeting of the finance committee. I'm joined today by Councillor Hudson, Councillor Aaron Reich, Councilor Moore, Councillor Nave, Counselor Jones Rouser, and the Bonadeo group. I'll let you gentlemen introduce yourselves and we'll get started. We're here for an independent audit results of the uh fiscal year ending 2025. So, Greg, take it away. All right, thank you. Um I'm Greg Evans from the Bonadio group with me today is Jacob Skebbell and Jack DeWare. Um these guys did all of the heavy lifting, so they're gonna answer the tough questions. Um I handed out a presentation, which is a summary of all of our audit reports that we issued. Um should answer a lot of your questions. Uh, but certainly if anything else came to mind, we can answer that too. So we'll start out right on page four, the scope of services for the speaker directly into the mic. Okay. Thank you. Sorry, better. Um scope of services performed. We did an audit of the financial statements. Uh we did a single audit, which is your audit of your federal awards expended. And we did an audit of your New York State DOT uh expenditures, and we also issued a management letter, which is just some best practices for the city's management. So moving on to page six, um audit results, our independent auditors report. This is where we give an opinion on your financial statements. I always say the numbers are yours. It's our job to give an opinion on those numbers. Um that being said, our opinion is an unmodified opinion, meaning we believe everything was presented uh fairly in all material respects. So highest uh level of assurance we can give you a clean opinion. Um in terms of internal controls, we look at your internal controls, we don't give an opinion on them. Um as part of our risk assessment, we work that in, and that's how we do our uh audit planning. Um we did note some findings relative to internal controls, one material weakness and three significant deficiencies. Um Jake's gonna walk you through those later in the presentation. In terms of uh accounting presentation, uh this year we did implement GASB 101, and we'll talk about that in a little bit. Um there were some audit adjustments, meaning we came in and proposed changes to your numbers. Um we'll include that as part of the findings as well. Um so the last one here difficulties encountered in performing the audit. This is kind of a kind of an important one. So we were delayed on certain things, in particular the CIFA, which again is your expenditure of federal awards. The delays in in that sort of really kind of hold up the completion of the audit because that's the basis of our audit planning again for the uh the federal piece of that. Um, and that sort of went back and forth all the way through February. So that's why we're here a little bit later than we'd like to be. The initial um plan was to issue this before January 31st, and we were about a month behind that. Um so that being said, um, I will point out that the financial statements are 114 pages, which is huge, right? There's a lot of information that we need to gather from the staff at BOA. And this is, you know, they're doing a great job, but it's just a lot. You know, it's a lot for the number of people they have. Um, and we're, you know, we end up on our team, we spend about 900 hours doing the audit. So you think about that, you think about all the things that have to go into getting this done on time. That's why it's a challenge. Um at this point, you know, we think about next year with uh Bureau of Accounts, they're right now down a person. You know, I think it's important that you know we we make sure that those positions get filled down there just so we can at least maintain that January 31st timeline. Any questions about that? Okay.
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