External audit gives Spring Cityclean bill of financial health

SPRING CITY—An external audit of Spring City’s finances culminated in a “clean opinion, an unmodified opinion, and that’s the best opinion you can receive,” auditor Ron Snow told the Spring City Council at this month’s council meeting.
Over the past year, there have been allegations against the mayor and city council, all unverified, of “sweetheart deals” and conflicts of interest. The term “corruption” has even come up.
But at a council meeting Thursday, Jan. 8, Snow, Gilbert and Stewart, the Provo accounting firm hired by the city to audit its books and evaluate internal controls, gave the city a squeaky clean evaluation.
Frequently, audits of city and town governments in Sanpete County culminate in one or two “findings” of at least minor problems in the way money is handled. But in a final “governance letter” to Spring City, Gilbert and Stewart reported “no findings.”
The audit covered the fiscal year running from July 1, 2024 to July 30, 2025. Year-end financial statements included in the audit report showed revenues for 2024-25 were up and expenditures down from the previous year.
Total revenue for all city activity during the year came to $3.78 million. That was $335,121 more than the $3.53 million reported for 2023-24.
Expenses for the year came to $2.39 million, $146, 026 less than the $2.54 million reported for the previous year.
The increase in revenue came from “service activities,” such as utilities, and increased grants, the audit said. “While general government and public safety expenses increased, all other department expenses decreased.”
Snow, the main auditor for the Spring City analysis, said the audit looked at three areas—the accuracy of the year-end financial statements, internal controls in place to make sure money is not misused by employees and officials, and compliance with certain state requirements.
“In our opinion, the financial statements presented represent fairly, in all material respects, the respective financial position of the governmental activity (and) business-type activity of Spring City…,” Snow told the council.
The audit found that controls on the handling of money within the city “are designed and implemented and are effectively working. So there are no areas where there are any issues or findings we need to bring to your attention.”
Each year, the Utah State Auditor’s Office asks external auditors to evaluate compliance with certain state laws related to handling of public funds. This year, the areas included preparing a proper budget, making sure taxes and other revenues that are restricted to certain uses are going to those uses, and transfers from enterprise funds (such as utilities) to other areas of the budget (such as the general fund) are handled properly.
“The state auditor gives us procedures to perform to ensure the city’s compliance with state law,” Snow told the council. “We went through those procedures…and found you are in compliance with state law in all the areas we looked at.”
The auditor described some of the “tests” his firm performed to evaluate city financial procedures and reports. The firm asks banks to confirm the numbers the city is reporting. It asks for confirmation from Sanpete County of how much the city received from property and sales tax.
Auditors look at invoices (bills) presented to the city and at the payments sent out to make sure the checks match the invoices.
They look at payroll, compensated absences (such as paid vacation and paid holidays) and depreciation expenses. “We go through and recalculate those balances to make sure those are meeting accounting standards,” Snow said.
“We do a lot of analytical reviews….we’ll look at a balance and compare it to last year. If we see differences that are significant enough, we’ll start asking questions to make sure we understand what those differences are and why.”
In evaluating controls, the auditors do walk-throughs of city offices, interview staff and ask staff to complete questionnaires.
“If I could just shout out to Ruth Ann (McCain) (the city recorder) and the staff, they do a great job,” Snow told the council. “An audit really requires a lot of work. We require a lot of information and documentation from them…I appreciate working with them. You guys are in good hands.”