I want to express my thanks to the Budget and Personnel Services Department (BAPS) for their reply to my query and for posting the City’s most recent Audit Reports to our City website.

Folks may already be aware, but essentially every municipality is required to have an annual financial statement audit of its figures. Laurel’s can be found on the page dedicated to audit reports and the reports are usually released around the spring following the June 30 fiscal year-end. (The FY 2025 report is currently in progress.)

Three of the key items to look for in our audit report are:

  1. Independent Auditor’s Opinion – This is usually right up front within the first couple pages. Using the FY 2024 audit as an example, you’ll see it starts on Page 4 of the PDF. There’s a lot of boilerplate language in the letter, but the key sentence is in second paragraph and is the one that starts with ”In our opinion, the financial statements referred to above present fairly …” – this essentially lets you know that the auditor believes there are no significant inaccuracies in the report’s numbers (and any deviation would typically be very concerning). I’m happy to share Laurel received a clean opinion and it’s a testament to the hard work and skill of our BAPS team!

  2. “Single Audit” Report – A second key item to look for is the auditor’s opinion for the ‘Single Audit’. This is an audit that’s required if a recipient receives/ spends more than $750,000 in federal funds for the year and addresses two objectives: (a) was that money accurately accounted for, and (b) did the recipient comply with the additional federal rules around how money is spent and tracked. Using the FY 2024 audit as an example again, you can find Laurel’s ‘Single Audit Report’ on page 73 of the PDF, and the key sentence can be found in the second paragraph: “In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs …". Again, a clean opinion and an affirmation of the work done by the BAPS and related City teams.

  3. Auditor’s Report on Internal Control – Lastly, the third key item to look for is the auditor’s report on internal control. “Internal controls” are an organization’s processes and protocols to prevent, detect, and correct financial irregularities. For Laurel’s FY 2024 audit, the report starts on page 76 of the PDF and the key paragraph is the fourth that reads, ”… we did not identify any deficiencies in internal control we consider to be material weaknesses …". “Material weaknesses” are an industry term that means the controls are very weak in a particular area and could lead to a meaningful error. So kudos again to the BAPS team: we’re 3 for 3 in a clean report!

So there you have it, our City’s audit reports and how to interpret the opinions rendered by auditor. 🙂 Of course, it’s also interesting to peruse through the financial figures as well, and perhaps we can walk through together in a future blog post. And as always, if you have any questions feel free to reach out to me and happy to help answer!