Following some concerning findings in the latest audit, new Lawrence City Manager Majed Al-Ghafry said he wants each city department to take a close look at processes, and there will be tough choices to make.
“When you create a system of of order, you get you get an outcome of order,” he said.
Al-Ghafry, who just attended his first commission meeting last week, is still getting his bearings. But in previous work as a project manager, he said he knew every detail of projects — budgets, expenditures, where the project manager is, and so forth. He said it’s imperative to do that.
“It was intimate, and we need to get to that level of learning,” he said.
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The city is going to need to look at “pretty much everything,” he said.
“Operations, capital, debt service, fees. We have expenditures outpacing the revenues. How do we increase revenues?” he said. “Those are some of the things that we need to take a look at.”
He said he wants each department director to be aware of SWOT analyses — Strengths, Weaknesses, Opportunities and Threats.
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“I will do a much better job if I know what those analyses are, and be able to work with with the with the rest of the city manager’s office on making sure that the directors of the departments are very diligent at addressing those — with specific timelines,” he said.
The city’s latest audit, which covers Jan. 1 through Dec. 31, 2025, was the subject of a work session during Tuesday’s Lawrence City Commission meeting.
The audit identified two significant deficiencies and two material weaknesses in the city’s finances.
“A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis,” according to the audit.
“A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance,” the audit continues.
Three of the four pertained to federal grants and reporting on those grants for the Lawrence Regional Airport. The other material weakness was in controls over the city’s reporting of a debt refunding transaction.
“The City did not properly account for the debt refunding transaction in the Water and Wastewater Fund,” according to the audit. “Specifically, the net carrying amount of the old debt was calculated incorrectly by overstating the unamortized premium by approximately $7.7 million, which resulted in the deferred gain on refunding being overstated by this same amount. This error required an adjusting journal entry to correct the financial statements.”
Kristen Hughes, audit senior manager with RSM, presented to the commission about the audit. In response to questions from commissioners, Hughes said the city cannot be considered a “low-risk auditee” under criteria for federal grants, and that can impact a number of major programs.
Commissioner Kristine Polian has spent her career in public finance. She said she’d reviewed audits and compliance going back to 2019. She said the audits found that the city did not properly record temporary notes, payable cash and capital assets within correct funds in fiscal years 2021 and 2022, which resulted in a finding in 2023.
“What I do see is a pattern. We’re not going in the right direction, right?” Polian said. “This is my world. I’ve had findings — significant deficiencies really, ultimately, don’t scare me that much. Material weaknesses do, and we’ve had a lot of them.”
Problems in multiple previous audits were airport-related. Al-Ghafry said the city just hired a new airport manager, and “that’s a huge help for us.” Turnover has been an issue, and he said the city needs to create procedures to ensure it doesn’t fall into the same challenges and issues again.
Rachelle Mathews, director of finance, said the city needs to work through its corrective action plan to mitigate the issues, then continue all the other internal controls and processes to work toward no findings in the future.
“Having a clear, unmodified audit would be amazing for us to do, and we’re going to work on that,” Al-Ghafry said. “We’re going to make sure that we have the processes and the procedures.”
He said doing so will fall on all city departments — not just the finance staff.
In response to a question from Polian about addressing the lack of oversight at the airport, Al-Ghafry said he thinks the city has taken its first step by hiring the general manager. Commissioners will soon hear a full presentation on the state of the airport, he said.
Commissioner Mike Dever, who attended the meeting remotely, said he was disappointed in what’s been going on at the airport, but overall he feels that the city is doing its best for the city, and for the community to document how money is spent.
“As a guy that audits people regularly, I understand that my job is to find something, and I understand that I’m going to find something if, you know, people are human,” Dever said. “So what I want to see is the the least amount of errors in an organization with the highest efficiency and the best people, and hopefully, we can keep our people around and we can see these processes through.”
Commissioner Amber Sellers said she didn’t want the governing body to prevent city departments from having the processes they need. She said she sees the audit as a way for staff to identify what they need and bring it back to the commission to support their work internally and to make sure that processes are effective.
Here’s the PDF of the audit (click here to open it in a new tab):
20260811-City-of-Lawrence-audit-compressedAl-Ghafry also pitched the idea of doing informational meetings on the fourth Tuesdays of the month.
The commission currently meets on the first three Tuesdays, and it has since 2016 when the change was made under then-city manager Tom Markus. An additional meeting each month could offer city staff a chance to share more information not only with the commission but with the community, Al-Ghafry said.
Also during the meeting, commissioners approved renewing an agreement with Columbia Capital Management LLC for investment advisory services for a minimum annual fee of $80,000.
“Under this agreement, Columbia Capital will continue to provide comprehensive investment advisory services, including the management of the City’s pooled cash, idle funds, capital accounts, and bond proceeds,” according to a memo in the meeting agenda. “The Consultant will act as a fiduciary, ensuring prudent investment management in accordance with Kansas statutes and City policy.”
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Mackenzie Clark (she/her), reporter/founder of The Lawrence Times, can be reached at [email protected]. Read more of her work for the Times here. Check out her staff bio here.
Nathan Kramer (he/him), a multimedia student journalist for The Lawrence Times since August 2024, is a recent graduate of Free State High School. He also served as a news photo editor for Free State’s student publication, where he worked as a videographer, photographer and motion designer. See more of his work for the Times here.
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