Parowan's fiscal 2025 audit reports a late fraud risk assessment
The city's auditors reported that Parowan did not complete and approve its fiscal 2025 fraud risk assessment within the fiscal year, as state rules require. The city said 75% of its front-office staff turned over in two months.
Continuing story: Auditing Parowan
Parowan did not complete and approve its fraud risk assessment for fiscal 2025 within that fiscal year, the city's auditors reported in the fiscal 2025 audit. [2]
Kimball & Roberts tested the city's compliance with state requirements in nine areas, including budgetary compliance, fund balance, open and public meetings and the fraud risk assessment. [1]
The finding
The auditors cited Utah Code 51-2a-201.5 and State Auditor guidance, which they said require each municipality to complete a fraud risk assessment every year within the fiscal year and have the governing body approve it. [2]
They wrote that Parowan's fiscal 2025 assessment "was performed after fiscal year-end and was not formally reviewed or adopted in a public council meeting as required." They attributed the delay to "a misunderstanding of timing requirements and lack of a formalized internal process." [2]
The auditors recommended that the city make sure the assessment is completed, presented to and approved by the council each year within the fiscal year, and that management assign responsibility and keep documentation of approval in meeting minutes. [2]
The city's response
The city's response says Parowan "had 75% of our front office staff turnover within a two-month period" during fiscal 2025, including the city treasurer and deputy city treasurer. It says the assessment was missed and not discovered until the annual audit. [2]
The response says a new treasurer and support staff have been trained and that future assessments will be completed within the fiscal year and uploaded to the State Auditor on time. The auditors said they did not audit the response. [2]
The rest of the audit
The auditors' opinion says the city complied in all material respects with the state requirements tested, and that the opinion is not modified with respect to the finding. They did not identify any deficiencies in internal control over compliance that they consider material weaknesses. [2]
Their separate report under Government Auditing Standards found no instances of noncompliance required to be reported under those standards and no material weaknesses in internal control over financial reporting. [3]
The council's Jan. 8, 2026 agenda listed the fiscal 2025 audit report and a "Fraud Risk Assessment - FY26" as action items. [4]
Sources
- Parowan City · Financial Statements, June 30, 2025, state compliance report (Kimball & Roberts; state-filed copy)
- Parowan City · Financial Statements, June 30, 2025, state compliance finding and city response
- Parowan City · Financial Statements, June 30, 2025, Government Auditing Standards report
- Parowan City Council · Jan. 8, 2026 meeting notice and agenda (Utah Public Notice Website)
Reporting by The Utah Ledger from the public records above. AI-assisted, checked against those records.