OWENSVILLE — Kristen DeLuca of K. DeLuca Audit Services LLC told the Owensville Board of Aldermen Monday that the city is in “good shape” following her recent audit report of the city’s finances.

The city received an “unmodified opinion” for the audit of the fiscal year ending June 30, 2025 – the best possible choice, according to DeLuca.

“It means that after performing the audit procedures, I feel these financials are fairly stated,” she shared with city officials.

Outlined in the documentation provided by DeLuca’s firm were assets, liabilities and remaining net position for the city as a whole, broken down between government activities, business activities and the city as a whole.

Assets totaled $24,463,015, liabilities totaled $2,553,382 and the city’s net position totaled $22,440,836.

The city saw an increase of $1,368,692 in net position for governmental activities and $228,933 for business type activities with the “city as a whole” having an increase of $1,597,625.

New for this year’s audit was the need for a single audit due to the city spending more than $750,000 in federal funding. Federal funding totaled $879,470 with $473,116 through a United States Department of Transportation grant through Missouri Highway and Transportation Commission’s Transportation Alternatives Program, $397,074 through the United States Environmental Protection Agency and Missouri Department of Natural Resources’ Driving Water State Revolving Fund and $9,280 from the United States Department of Homeland Security and Missouri State Emergency Management Agency’s Emergency Management Performance Grants.

DeLuca advised the board of two notable findings regarding the financial statement and federal awards.

“Because of a limited number of available personnel, it is not always possible to adequately segregate certain incompatible duties so that no one employee has access to both physical assets and the related accounting records, or to all phases of a transaction,” DeLuca stated in the financial statement findings.

According to the criteria, federal internal control standards require non-federal entities to establish and maintain effective internal control over federal awards.

The firm recommended the city implement compensating controls such as independent reviews, supervisory approvals or periodic oversight as well as written internal control policies that clearly define financial procedures and responsibilities.

“You really are doing the best you can with the staff that you have available – now, we just have to make it official,” DeLuca said. “So I’m not recommending you change a whole lot, it’s just documenting what you’re already doing.”

A second finding identified that the city did not verify suspension or debarment status of the contractor prior to awarding the federally funding contract for the lead service line inventory project, as required by federal regulations.

“My recommendation is to amend your procurement policy that has a little paragraph that you are aware that this needs to be done and you will do it before awarding federal contracts going forward,” DeLuca said.

City officials committed to resolving both issues by year-end with the corrective action of developing written internal control policies and implementing compensating controls to strengthen segregation of duties for the first issue and revision of the procurement procedures and staff training to ensure verification is completed and retained for all federally funded procurements.

Mayor Kevin McFadden asked DeLuca how Owensville fares compared to other cities.

“You’re doing great,” she said. “I mean, obviously your debt is basically nonexistent, and I expect that to change in the near future. You know, you can’t sustain that forever, but enjoy it while you can.”

Aldermen are scheduled to meet again at 7 p.m. Monday, March 16, at City Hall.