Orem's general fund topped the state reserve cap in every audit from fiscal 2019 through 2025

Orem's independent auditors reported that the city's general fund balance exceeded the limit in state law in every annual audit from fiscal 2019 through fiscal 2025. ^{[1][2][3][4][5][6]}

Utah law caps a city's unassigned, assigned and committed general fund balance at 35% of the fund's revenue for the year. ^[1] The auditors' findings for fiscal 2019 and 2020 cited a 25% limit. ^[6]

What the auditors found

For fiscal 2024, Larson & Company reported $34.63 million in that balance against a maximum of $32.00 million, an excess of $2.63 million. ^[2]

Auditors reported that Orem exceeded the reserve cap in fiscal 2025, but conflicting figures in their finding prevent The Ledger from independently confirming the amount. ^[1] The finding states the excess as $4,072,195, using a maximum of $30,563,646. ^[1] It lists an unassigned balance of $26,559,579, an assigned balance of $9,713,187 and a committed balance of $0, which add to $36,272,766, and gives their total as $47,593,378. ^[1]

Neither total minus the maximum equals the stated excess: the listed balances are $5,709,120 over the maximum, and the stated total is $17,029,732 over it. ^[1] The finding does not explain the difference, so $4.07 million here is the auditors' stated figure, not an amount The Ledger could recompute. ^[1]

The findings for fiscal 2021, 2022 and 2023 say the balance exceeded the limit without giving amounts. ^[3][4][5]

The auditors attributed the fiscal 2022 through 2025 findings to oversight by management and staff. ^[1][2][3][4] For fiscal 2024 and 2025, they wrote that money being set aside for future capital projects was not transferred out of the general fund by year-end. ^[1][2]

The fiscal 2020, 2021 and 2025 reports say the findings did not change the auditors' opinion that the city complied in all material respects with state requirements. ^[1][5][6]

What the city said

For fiscal 2022, the city told the auditors that sales tax revenue had come in higher than expected and that it would move the needed amount to its capital projects fund through a budget amendment. ^[4]

For fiscal 2023, the city responded that it "expects to be over this limit in the next coming years." ^[3]

For fiscal 2025, the city said it would include a budget amendment in fiscal 2026 to transfer enough money from the general fund to the capital projects fund. ^[1]

The city's fiscal 2025 annual report says the mayor and council target general fund reserves of about 15% of revenue, and that the city transferred $3.2 million to capital projects during that year "to stay within" the state limit. ^[7]

At an Aug. 27, 2026, budget hearing, Chief Financial Officer Brandon Nelson said the available fund balance is roughly $14 million, about 20% of the operating budget, after committed purchase orders and capital projects. ^[8]