Kanab's fiscal 2025 audit reports a year-end adjustment finding and a fraud-risk compliance item

Kanab's auditors reported two findings in their review of the fiscal year that ended June 30, 2025: one about how the city's books are closed at year end and one about a state fraud-prevention requirement. ^[1][2]

Neither changed the auditors' opinions. HintonBurdick gave the financial statements an unmodified opinion and said the city complied in all material respects with the state requirements it tested. ^[4][3]

Year-end adjustments and reconciliations

Finding 2007-001, listed as a significant deficiency, says audit procedures identified journal entries needed to make accruals and other adjustments that the city's internal controls had not initially identified. It says reconciliations for some general ledger accounts were not being performed, which contributed to the misstatements. ^[1]

The finding states that the city's financial statements "would not have been fairly stated in all material respects without the adjustments." The auditors recommended that the city post all significant adjustments before the audit and continue monthly reconciliations of subsidiary ledgers to the general ledger. ^[1]

The auditors reported no material weaknesses. ^[1]

The fraud risk assessment

Finding 2025-001 says Kanab prepared its annual fraud risk assessment and submitted it to the State Auditor, but the auditors "could not locate evidence that it was presented in a City Council Meeting," as the requirement calls for. The auditors wrote that city management "may not have been aware of this requirement." ^[2]

The council's Jan. 20, 2026 agenda listed a "Presentation of State-Required Fraud Risk Assessment Report" as a discussion item. ^[5]

The city's response

In a response letter to the State Auditor, the city manager wrote that management concurs with the reconciliation finding and that the city will keep strengthening its procedures for year-end adjustments. ^[6]

On the fraud risk assessment, the letter says the city will add the item to the January council calendar and to its year-end compliance checklist. The auditors did not audit the response. ^[6][2]