Service district's draft audit added $27.6 million in unrecorded Kearns assets
The posted draft of the Greater Salt Lake Municipal Services District's FY2025 audit reports a material weakness: capital assets had not been recorded. Correcting it raised Kearns's opening net position by $27,629,358. The draft also says fee-related spending was not tracked by activity.
Continuing story: Auditing Kearns
The draft FY2025 audit of the Greater Salt Lake Municipal Services District, which keeps Kearns's books, reports a material weakness in internal control over financial reporting. [1]
Under finding 2025-001, 'Restatements,' the auditor writes that the district found capital assets that had not been recorded and adjusted its records. The cause given is that the district 'did not have sufficient controls in place to ensure all capital assets were identified, tracked, and recorded in the accounting records on a timely basis.' [1]
The district's response reads: 'We appreciate your recommendations. We have reviewed these items and will make necessary changes.' [1]
The Kearns column
In the component-unit schedules, Kearns's net position at the start of fiscal 2025 was reported as $56,184,076. A $27,629,358 correction of an error raised it to $83,813,434. With a $9,610,620 increase during the year, Kearns ended June 30, 2025, at $93,424,054. [2]
Across all the district's component units, the correction totals $70,906,372, according to Note 8. [3]
The auditor's report gives an unmodified opinion and adds an emphasis-of-matter paragraph noting the restatement. [5]
Fees
The draft state compliance report gives an unmodified opinion but reports noncompliance under 'Governmental Fees': 'expenditures are not being tracked for each specific service or regulatory activity for which the fees are charged.' [1]
The district's response was that it would 'implement procedures as appropriate.' The same report says the auditor found no material weaknesses in internal control over state compliance. [1]
The report does not say which fees or which communities are affected. [1]
The board's vote
At the district board's March 25, 2026 meeting, the auditor and the district's finance director presented the audited statements. The minutes say the auditor declared the statements in compliance in all material respects, and that legal counsel suggested several acceptable non-substantive wording changes. [4]
The board voted to accept the statements, with trustees Zuspan, Brems, Clayton, Jensen, Perry and Valdez voting yes. [4]
The findings are the district's, not a finding against the Kearns City Council. The $27,629,358 correction adds previously unrecorded capital assets to the accounts; it is not cash lost or found, and not spending. The reports quoted are the posted drafts; The Ledger could not open the final versions.
Sources
- Greater Salt Lake Municipal Services District · FY2025 compliance reports (posted draft)
- Greater Salt Lake Municipal Services District · FY2025 draft statements, component-unit schedules
- Greater Salt Lake Municipal Services District · FY2025 draft statements, Note 8 restatement
- Greater Salt Lake Municipal Services District · March 25, 2026 board minutes
- Greater Salt Lake Municipal Services District · FY2025 financial statements (posted draft)
Reporting by The Utah Ledger from the public records above. AI-assisted, checked against those records.