Iowa State Auditor’s Office has released its audit report for the City of Early’s Fiscal Year (FY) 2025. The review evaluated selected accounting records, internal controls, and compliance with state requirements and identified several deficiencies requiring correction. Auditors found multiple examples of limited segregation of duties, which is common for government entities with limited staff. State officials noted several unresolved bank reconciliations, including an $11,675 variance between bank records and internal ledgers. The report also cited budget compliance issues, including expenditures exceeding appropriations before the required budget amendments and improper notice timing for a public budget hearing. In addition, the city reported fund balance deficits across several accounts and failed to meet revenue bond coverage requirements for its water and sewer utilities. One notable piece of the report highlights Local Option Sales Tax (LOST) allocations. The voter-approved LOST requires 20 percent of sales tax revenue to be set aside for property tax relief, but auditors found that only 9.8 percent had been transferred. State auditors did not suggest that the noted items were the result of malfeasance, but they indicated that corrective action was necessary to ensure proper management of taxpayer funds. The auditor’s office recommended that the Early City Council strengthen its direct oversight of financial operations, improve internal controls, and ensure compliance with state law. A link to Early’s full FY25 audit is included with this story on our website.
______
