The six-year record shows a clear change beginning in 2023
For fiscal years 2020, 2021, and 2022, Lebanon's auditors issued unmodified opinions and reported no financial-statement findings, no federal-award findings, no material weaknesses, and no significant deficiencies.
That changed in fiscal year 2023, when the auditors reported two material weaknesses in financial reporting. Both repeated in 2024. By 2025, one had been resolved, but the expenditure-related material weakness remained for a third year. Budget compliance also repeated for a second year.
The amount of audit adjustments connected to the repeated expenditure-related finding fell from about $21.245 million in 2023 to $7.735 million in 2024 and $752,000 in 2025. That is meaningful improvement in the size of identified adjustments, but the auditors still classified the underlying control problem as a material weakness in 2025.
All six audits issued unmodified opinions on the final financial statements. A clean opinion and control findings can both be true: the opinion applies to the final audited statements, while the findings describe weaknesses in the processes used to prepare or manage the information.
Current conclusion: The audits support describing fiscal years 2023 through 2025 as a continuing financial-management problem, especially in year-end reporting, classification, cutoff, and budget controls. The earlier audits show that this was a change from the immediately preceding three years. The records do not establish theft, missing cash, intentional misstatement, or that audit-adjustment totals were public losses.
Research snapshot
Where this investigation stands
Why it matters
Financial controls affect the reliability of public information
Audit findings do not automatically mean money was stolen or lost. They still matter because residents, officials, lenders, and state agencies rely on accurate and timely financial records.
- A multi-year comparison can show whether a finding is new, repeated, improved, or resolved.
- Weak closing and review procedures can allow important errors to remain until auditors identify them.
- Budget-compliance problems can make it harder to understand what the city legally authorized and how projects were funded.
- Resolved findings can show that city staff successfully corrected some problems.
Six-year overview
The reported pattern changed in fiscal year 2023
| Fiscal year | Opinion | Financial-statement findings | Federal findings | Material weaknesses | Summary |
|---|---|---|---|---|---|
| 2020 | Unmodified | 0 | 0 | 0 | No matters reported |
| 2021 | Unmodified | 0 | 0 | 0 | No matters reported |
| 2022 | Unmodified | 0 | 0 | 0 | No matters reported |
| 2023 | Unmodified | 2 | 0 | 2 | Two new material weaknesses |
| 2024 | Unmodified | 3 | 1 | 2 | Both weaknesses repeated; budget and federal reporting findings added |
| 2025 | Unmodified | 2 | 0 | 1 | One weakness and budget compliance remained; two prior findings resolved |
Detailed comparison
What repeated, improved, or was resolved after 2023?
| Topic | FY2023 | FY2024 | FY2025 | Status through FY2025 |
|---|---|---|---|---|
| Financial-statement opinion | Unmodified | Unmodified | Unmodified | Final audited statements received clean opinions |
| Material weaknesses | 2 | 2 | 1 | At least one remained each year |
| Expenditure, expense, asset, and liability reporting | Finding 2023-002; about $21.245 million in adjustments | Finding 2024-001; repeated; about $7.735 million | Finding 2025-001; repeated; about $752,000 | Repeated for three years |
| Revenue recognition and receivables | Finding 2023-001; about $4.641 million in adjustments | Finding 2024-002; repeated; about $2.969 million | Listed as resolved | Resolved by FY2025 |
| Budget compliance | None reported | Finding 2024-003; $850,853 above available resources across two funds | Finding 2025-002; repeated; $1,356,884 across three funds | Repeated for two years |
| Federal grant reporting | None reported | Finding 2024-004; inaccurate quarterly SLFRF reporting | Listed as resolved | Resolved by FY2025 |
What is confirmed
Facts directly supported by the audits
- The 2020, 2021, and 2022 finding schedules each say no financial-statement or federal-award matters were reported.
- The 2020, 2021, and 2022 audit summaries report no material weaknesses and no significant deficiencies.
- Each of the six audits issued an unmodified opinion on the final financial statements.
- The first material weaknesses in this six-year review appear in fiscal year 2023.
- The expenditure and related assets and liabilities finding repeated in 2024 and 2025.
- The revenue-recognition finding repeated in 2024 and was reported resolved in 2025.
- Budget-compliance noncompliance was reported in 2024 and repeated in 2025.
- The 2024 federal grant-reporting finding was reported resolved in 2025.
- The adjustment amount connected to the repeated expenditure-related finding declined substantially by 2025.
What is disputed or unclear
The audits do not answer these questions
- What changed in the city's financial reporting or audit process between fiscal years 2022 and 2023.
- Which specific controls were implemented after each corrective action plan.
- Whether those controls were independently tested before the next audit.
- Why the expenditure-related material weakness remained after the city's earlier planned completion date.
- Why budget compliance repeated in 2025 after first being reported in 2024.
- Whether City Council received periodic written progress reports on corrective actions.
- Whether the fiscal-year 2026 audit will show the remaining findings as resolved.
What the audits do not prove
Important limits on the conclusion
- The reports do not establish theft, embezzlement, or missing cash.
- Audit-adjustment amounts do not automatically equal wasted or lost public money.
- The reports do not say the city intentionally misstated its financial statements.
- The 2024 and 2025 budget findings were not year-end deficit findings. Actual expenditures remained below appropriations.
- The earlier reports do not prove that controls were perfect; they establish only that the auditors reported no findings under the scope of those audits.
- The auditors did not express an opinion on whether the city's internal controls were effective.
Evidence reviewed
Six official City of Lebanon audit reports
The Tennessee Comptroller's website uses an advanced search system for contracted local-government audits. Search for Lebanon, entity type City, and the fiscal year.
Fiscal years 2020 through 2022
- FY2020: Findings page 158 and prior-year findings page 159. Both say no matters were reported.
- FY2021: Findings page 154 and prior-year findings page 155. Both say no matters were reported.
- FY2022: Findings page 155 and prior-year findings page 156. Both say no matters were reported.
These three reports were reviewed as image-only scanned PDFs.
Fiscal years 2023 through 2025
- FY2023: File identifier
1747-2023-c-lebanon-rpt-cpa764-5-31-24.pdf. Findings and corrective action: pages 154-161. - FY2024: File identifier
1747-2024-c-lebanon-rpt-cpa764-12-31-24.pdf. Findings and prior-year status: pages 148-153. - FY2025: File identifier
1747-2025-c-lebanon-rpt-cpa764-12-29-25.pdf. Findings and prior-year status: pages 145-150.
Open the Tennessee Comptroller's Local Government Audit search
Field notes
What required careful interpretation
Field note 1 · Fiscal year 2023 was a break from the prior three reports
The 2020, 2021, and 2022 schedules reported no matters. The 2023 audit reported two material weaknesses. That establishes a change in the published audit record, but the audits do not explain why the change occurred.
Assessment: CHANGE CONFIRMED; CAUSE UNCLEAR.
Field note 2 · A clean opinion does not mean there were no findings
All six audits said the final financial statements were presented fairly. The 2023-2025 reports also identified material weaknesses or noncompliance. The opinion applies to the final audited statements; the findings describe weaknesses in processes and controls.
Assessment: BOTH STATEMENTS ARE CONFIRMED.
Field note 3 · Audit adjustments are not automatically losses
The adjustments included timing corrections, reclassifications, liabilities, interfund activity, grant revenue, capital assets, accumulated depreciation, and other accounting entries. Combining the totals into a claim that money was missing would misstate the records.
Assessment: CLAIMS OF MISSING MONEY ARE NOT SUPPORTED.
Field note 4 · The repeated finding became smaller but did not disappear
The amount of adjustments associated with the expenditure-related finding fell from about $21.245 million to $752,000. That supports describing the scale as improved. Because the auditors repeated the material weakness in 2025, it does not support saying the control problem was fully corrected.
Assessment: IMPROVEMENT CONFIRMED; RESOLUTION NOT CONFIRMED.
Field note 5 · The budget findings were compliance findings, not final deficits
In 2024 and 2025, appropriations in certain funds exceeded estimated revenue and available fund balance. The auditors also stated that actual expenditures remained below appropriations, so the affected funds did not end with deficit fund balances.
Assessment: NONCOMPLIANCE CONFIRMED; YEAR-END DEFICIT CLAIM NOT SUPPORTED.
Outstanding questions
Records that would strengthen the conclusion
- Records explaining what changed between fiscal years 2022 and 2023.
- Detailed corrective action plans beyond the brief responses included in the audits.
- Finance-department closing checklists and reconciliation procedures.
- City Council budget-amendment ordinances for the funds named in the 2024 and 2025 findings.
- Finance Committee or City Council discussions of the audit findings.
- The fiscal-year 2026 audit when released.
What would change the conclusion
The current answer may improve or become more concerning
The conclusion would become more favorable if later records show that the expenditure-related material weakness and budget-compliance finding were resolved and that new controls were tested successfully. It would become more concerning if the same findings repeat again, adjustment amounts increase, new material weaknesses appear, or the city cannot document corrective controls.
Civic learning note
A clean audit opinion and a material weakness can both be true
An unmodified opinion means the auditor concluded that the final financial statements were presented fairly under the applicable accounting rules.
A material weakness means a control problem was serious enough that a material financial-statement error might not be prevented, or detected and corrected, on time.
Auditors can propose corrections during the audit, the city can record those corrections, and the final statements can still receive an unmodified opinion while the underlying control weakness is reported.
Revision history
How this page has changed
- Expanded the review from fiscal years 2023-2025 to fiscal years 2020-2025 after obtaining the three earlier audit reports. Added the three-year no-finding baseline and clarified that the published pattern changed in 2023. The evidence label remained Supported.
- Initial publication based on the fiscal-year 2023, 2024, and 2025 audit reports.
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