HomeMy WebLinkAbout2.10.26 ACFR Intro Slides-Finance_V.2Fiscal year 2025 (FY25) audit results & annual COMPREHENSIVE financial report (ACFR)
February 10, 2026
Aaron Funk, Controller, City of Bozeman
Janeen Hathcock, Partner, Eide Bailly LLP
1
Fy25 audit results & annual financial report
Acknowledging the dedication and teamwork of City staff
City-wide teamwork and collaboration
Financial stewardship
Special thank you to accounting staff for outstanding
efforts in preparation of this report:
Shana Wold, Accountant II
Amanda Genzlinger, Accountant I
Jamie Grabinski, Grants Coordinator
Going through an audit and receiving a clean opinion requires assistance and teamwork across all city departments, and I want to express our appreciation to all city employees that assist
in financial responsibilities throughout the fiscal year.
I also want to recognize and thank our Accountants Shana Wold and Amanda Genzlinger and our grants coordinator Jamie Grabinski for their efforts in preparing the report and completing
the FY 25 audit.
The FY24 ACFR was the first ACFR that was prepared internally by the City we received the Certificate of Achievement for Excellence in Financial Reporting from GFOA. This was the 41st
consecutive year that the City has received this distinction for the quality of its financial reporting. We believe this FY25 ACFR is worthy of the award and has been submitted to GFOA
for review.
2
Fy25 audit results & annual financial report
Why do we prepare an annual financial report?
Primary audience for many details in the annual report include bond issuers and investors, credit ratings agencies, and government oversight bodies including our auditors.
Accountability: Complete financial report available to the public showing the audited results of activities and financial position of the City.
Compliance: Fulfills legal requirements and standards set by the Governmental Accounting Standards Board (GASB) and the State of Montana.
Financial Health Snapshot: Provides a point-in-time view of the City’s financial position.
Investor Confidence: Essential for establishing maintaining trust with bondholders and is the primary document used by credit rating agencies to determine the city’s credit rating whenever
this city issues bonds.
Decision-Making Tool: Supports informed decisions by providing a foundation of actual financial data.
3
Fy25 audit results & annual financial report
What the ACFR does not show
Carry Forwards: Explain that many capital projects and some operational projects span multiple years.
Reserves: Some reserves that may be recommended and included in adopted budgets do not meet the requirements of GASB to be classified “restricted”, “committed” or “assigned” would be
reported as “unassigned” in this report. For example, capital projects that have not yet begun and are not under contract.
Projected Revenues/Expenditures: including changes due to collective bargaining or insurance renewals.
Unanticipated Future Needs: Impacts of legislative session.
4
Fy25 audit results & annual financial report
Timeline of Annual Audit and Financial Report
Trial Balance: Departments are submitting and processing prior fiscal year activity until the first part of August. We also receive 3 distributions of tax revenue from the county after
fiscal year end, with the final payment coming in September. Generally, between August and September all required financial reporting adjustments are entered, and a draft of the ACFR
is prepared by accounting. An adjusted trial balance and draft ACFR is provided to auditors in early October.
Audit Fieldwork: Our auditors schedule and perform most of the audit work during 2 separate weeks in October.
Review: Audit fieldwork and ACFR are review by Janeen. The city addresses ACFR comments and/or audit questions from that review and provides an updated draft. Auditors are also required
to have a quality control review performed of the audit documentation and ACFR. The city addresses any comments and questions from that review and prepares a final draft of the ACFR.
Audit Issuance: Ideally, we are trying to issue the ACFR in December and present to Commission in early January. Unfortunately, there were delays in the Federal compliance supplement
as well as the State of Montana’s compliance document held up the formal audit opinion and issuance until late in December and made scheduling the timing of this presentation uncertain.
5
Key Components
Financial Section (Pages 1-100)
MD & A
Condensed Comparative Financial Statements (Pages. 7 -8)
Discussion of Significant Year over Year Changes & Variances
What is in an Annual Comprehensive Financial Report (ACFR)?
Fy25 audit results & annual financial report
Introductory section (letter of transmittal) helps offer context including background on the structure of the government, the environment in which it operates and the types of services
it provides. It also provides a forum for management to offer a more subjective analysis of the government’s financial situation.
Financial section includes the independent auditor’s report, which Janeen will go over in a few minutes, Management’s Discussion & Analysis (MD&A), as well as all the required basic
financial statements and notes to the financial statements.
MD&A provides the only comparative presentation of the financial statements in the ACFR. The comparisons are a condensed version of the Government-wide Statements from pages 19-22. The
Governmental Activities columns includes the GF, all special revenue funds, debt service funds, capital projects funds, and internal service funds. The Business-type activities includes
the Water, Waste water, Solid Waste, Storm water, and Parking funds.
High level discussion and explanations of Significant year over year changes for Governmental and Bus. Type Activities, as well as significant variances between original budget and final
budget for the General Fund, and significant variances between final budget and actual results for the General Fund and all major governmental funds.
6
Key Components (cont.)
Financial Section (Pages 1-100)
Basic Financial Statements – Governmental Funds (pages 23 – 27)
What is in an Annual Comprehensive Financial Report (ACFR)?
Fy25 audit results & annual financial report
Financial section – Basic Financial Statements – Governmental Funds. The city reported 5 major governmental funds in FY25. Major fund determination is required by GAAP and is also important
because it is a key factor in the extent of audit work performed each fiscal year. All individual funds that don’t meet the major fund threshold are combined in the Other Governmental
Funds column. In FY25, the other governmental funds column includes almost 30 individual funds.
Notes: Primarily a quantitative determination calculated each year (10% AND 5% rule). There is a qualitative factor the City can evaluate if a fund does not meet the quantitative threshold
to be reported as major.
7
Key Components (cont.)
Financial Section (Pages 1-100)
Basic Financial Statements – Proprietary Funds (pages 30 - 36)
What is in an Annual Comprehensive Financial Report (ACFR)?
Fy25 audit results & annual financial report
Financial section – Basic Financial Statements – Proprietary Funds. The city reported 3 major business-type or enterprise funds in FY25 with 2 enterprise funds reported as non-major.
The proprietary fund statements also include a single column for all internal service funds. In FY25, the city has 3 different internal service funds.
8
Key Components (cont.)
Financial Section (Pages 1-100)
Notes to the Financial Statements (Pages 40-100)
Supplementary Information (Pages 101-154)
Required Supplementary Information
Budget to Actual Schedules for General Fund & Major Special Revenue Funds
Other Supplementary Information
Budget to Actuals Schedules for Other Major Funds
Financial Statements and Budget to Actual Schedules for all the Other Governmental column and Non-Major Business Type Column from the Basic Financial Statements Section.
What is in an Annual Comprehensive Financial Report (ACFR)?
Fy25 audit results & annual financial report
Financial section – Notes
Supplementary Information – Budget to Actuals and Statements for All Other Governmental and Proprietary Funds.
9
Key Components (cont.)
Statistical Section (Pages 156-199)
Financial Trends Over Past 10 Years – Government Wide & Total Governmental Funds (Pages 159-165)
Other Tax Revenue, Debt, Demographic, and Operating Stats (Pages 166-199)
Combination of city activity and external information obtained from the County, State, and other sources.
What is in an Annual Comprehensive Financial Report (ACFR)?
Fy25 audit results & annual financial report
10
City of Bozeman FY25 Financial Statement and Single Audit Presentation
Presented by Janeen Hathcock
SLIDE
11
Agenda
12
Independent auditor’s report
Clean “unmodified” opinion
The best you can receive
First page of the opinion
Indicates what was audited – 1st paragraph
Opinions – 2nd paragraph
Basis for Opinions – 3rd paragraph
2nd page of the opinion
Emphasis of a Matter – 4th paragraph
Management’s responsibilities
Auditor’s responsibilities
SLIDE
13
Independent auditor’s report
Third and Fourth Pages of the opinion
Other Matters
Required Supplementary Information (unaudited)
Management’s Discussion & Analysis
Pension and OPEB Schedules
Budget to Actual Schedules (General Fund and Major Special Revenue Funds)
Other Information (in-relation to opinion)
Combining Statements
Other Budgetary schedules
SEFA (included in compliance section)
Other Information (unaudited)
Introductory and Statistical Information
Other reporting required by GAAS
SLIDE
14
Schedule of net position
SLIDE
15
Changes in net position
SLIDE
16
Net position trends
SLIDE
17
Significant note disclosures
SLIDE
18
Results
No Findings Noted Regarding State of Montana Compliance.
State of Montana Compliance
SLIDE
19
Upcoming GASB implementations
SLIDE
20
Single Audit Package
21
Report on financial statement internal controls
SLIDE
22
Uniform guidance report
23
Schedule of expenditures of federal awards (SEFA)
Purpose
Summary of annual federal expenditures
Required if expenditures exceed $750k
2025 – 3.4M
2024 – 5.6M
2023 – 8.7M
SLIDE
24
Summary of auditor’s results
SLIDE
25
Communication with governance
26
Janeen Hathcock
jhathcock@eidebailly.com
SLIDE
27