Draft district audit adds $34.6 million in previously unrecorded assets to Magna's books

Draft fiscal 2025 financial statements for the Greater Salt Lake Municipal Services District add $34,565,111 to Magna's opening net position to correct a prior-period error related to capital assets, according to the component-unit schedules in the draft. ^[1]

The draft, dated March 20, 2026 and marked "DRAFT" on its pages, was posted on the Utah Public Notice Website. The Ledger has not obtained the final issued report. ^[1]

The correction

Magna's column in the draft statement of activities shows net position of $71,572,441 at the start of the year as previously reported, the $34,565,111 restatement for correction of an error, and a restated opening of $106,137,552. With a $6,894,918 change during the year, net position ends at $113,032,470. ^[1]

The $71,572,441 matches the ending net position in the district's final report for the six months ended June 30, 2024. ^[3]

Note 8 of the draft says the district recorded a correction of a prior-period error related to capital assets. Across all component units, the draft's restatement table shows a $70,906,372 correction. ^[1]

At June 30, 2025, the draft lists $84,417,917 in land, roads, bridges and construction in progress and $24,860,334 in buildings, equipment and infrastructure in Magna's column. ^[1]

The control finding

The draft compliance reports, also dated March 20, 2026, include finding 2025-001, titled "Restatements." It says the auditor found capital assets that had not been recorded and that the district lacked sufficient controls to make sure all capital assets were identified, tracked and recorded on a timely basis. The summary classifies it as a material weakness in financial reporting. ^[2]

The auditor recommended controls to identify, record and reconcile capital assets throughout the year. Management responded, "We have reviewed these items and will make necessary changes." ^[2]

The draft's state compliance report also notes that expenditures are not being tracked for each specific service or regulatory activity for which the district charges fees. Management responded that it would implement procedures as appropriate. The report does not say which fees are involved. ^[2]

What the draft did not find

The draft gives an unmodified opinion on the financial statements and reports no noncompliance material to them. For the one major federal program tested, Coronavirus State and Local Fiscal Recovery Funds (21.027), it gives an unmodified opinion and reports no findings required under federal rules. Its state compliance opinion is also unmodified. ^[2]