Morgan's auditors reported a state compliance item in a letter not included in the filed audit

Morgan City's fiscal 2025 audit includes a report required by the Utah State Auditor's State Compliance Audit Guide. Gilbert & Stewart says Morgan complied, in all material respects, with the state requirements it tested for the year ended June 30, 2025. ^[1]

Under "Other Matters," the same report says the procedures disclosed instances of noncompliance required to be reported under the guide. They are described in a letter to management dated Dec. 31, 2025, as item 25-1. The opinion was not modified for them. ^[1]

The report says the city's response to item 25-1 was not subjected to audit procedures. The letter and the response are not included in the copy filed with the State Auditor. ^[1]

What was tested

The auditors tested six areas: budgetary compliance, fund balance, restricted taxes and related revenues, fraud risk assessment, government fees, and enterprise fund transfers, reimbursements, loans and services. ^[1]

They identified no internal control deficiencies over compliance they considered material weaknesses. ^[1]

Deposits

The audit's deposit note says the city has no formal deposit policy for custodial credit risk. At June 30, 2025, $439,920 of its $689,920 in bank balances was uninsured and uncollateralized. ^[2]