Sandy's FY2025 audit: clean opinion, a material weakness in year-end reporting and a restated general fund

Eide Bailly LLP gave Sandy City an unmodified opinion on its financial statements for the fiscal year ended June 30, 2025 (FY2025), in a report dated Feb. 24, 2026. The report was attached to an informational presentation by the city's administrative services department on the City Council's March 24, 2026 agenda. ^[1][4]

In separate reports dated the same day, the auditor identified one material weakness in internal control over financial reporting and one instance of noncompliance with state budget law. ^[2]

Finding 2025-001: audit adjustments and a restatement

The auditor reports that audit adjustments were material in the aggregate and that the prior year was restated because payroll liabilities were overstated. Other adjustments affected receivables, capital assets, leases, subscription arrangements, accrued and compensated-absence liabilities, long-term debt and deferred inflows. ^[2]

The stated cause is that supporting schedules contained errors that were not adequately reconciled or reviewed before the initial close or during preparation of the statements. The auditor recommended the city review the timing and process of year-end reconciliations and continue training the staff who perform them. ^[2]

Management agreed and said it would review the year-end reconciliation process and timing "before the fiscal year 2026 audit commences." ^[2]

The auditor's opinion describes the correction as errors that overstated accounts payable and understated revenues as of June 30, 2024, and says the restatement was made to the general fund balance and governmental activities net position as of July 1, 2024. It says the opinion is not modified with respect to that matter. ^[1]

Finding 2025-002: Recreation Fund over budget

The state compliance report says Recreation Fund expenditures exceeded the final adopted budget by approximately $5,000, so the city did not comply with Utah Code 10-6-123, which bars spending above the final budget. Management agreed with the finding. ^[2]

The auditor's state compliance opinion is not modified for that finding. The report says the city complied in all material respects with the state requirements tested, which included budgetary compliance, fund balance, the justice court and restricted taxes. ^[2]

The general fund, FY2025

The general fund's balance at the start of the year, previously reported as $9,493,192, was increased by a $1,339,323 adjustment to a restated $10,832,515. ^[3]

The fund took in $72,525,908 and spent $67,482,870. After transfers, including $1,666,230 to the equipment management fund, its balance fell by $662,409 and ended the year at $10,170,105. ^[3]

Of that ending balance, the fund balance sheet lists $9,393,377 unassigned, $711,558 assigned and $65,170 nonspendable. ^[3]

The report's own figures differ in places. Its highlights put the general fund's unassigned balance at $9,631,648, or 12.4 percent of general fund expenditures; a later section uses 14.2 percent for the same amount; and the operating statement shows the ending balance as $10,170,106, $1 more than the balance sheet. ^[3]

Our earlier story on fiscal 2024 reported the ending balance of $9,493,192. That figure is the one later restated. ^[3]

Redevelopment Agency fund

The Redevelopment Agency fund, a special revenue fund whose balance is reported as restricted, ended FY2025 with a balance of $49,880,682, up $4,082,483. It took in $12,866,373 and spent $3,915,409. ^[3]

The auditor's letter to the council

In a letter to the council, the auditor reported no significant difficulties and no disagreements with management. It says the city adopted a new accounting standard for compensated absences, GASB Statement No. 101, applied from July 1, 2024. The letter also lists misstatements that management judged immaterial and did not correct. ^[5]

Update, Oct. 17, 2026: what Note 23 says

Note 23 of the annual report says Sandy found "an error in amounts previously reported in the fiscal year 2015 thru 2024" and that "payroll liability balances in the General Fund were overstated related to benefit accruals." ^[6]

The note restates the general fund's beginning balance from $9,493,192 to $10,832,515 and governmental activities' beginning net position from $631,531,960 to $632,871,283, an increase of $1,339,323 in each. It says the correction "increased the change in fund balance in the General Fund by $0 for the fiscal year ended 2024." ^[6]

Note 23's description matches finding 2025-001, which also cites overstated payroll liabilities. The auditor's opinion paragraph still describes the error as an overstatement of accounts payable and an understatement of revenues; the report does not explain the difference. ^[1][2][6]