Brandon Valentini, a partner at Moss Adams' Albuquerque office, presented the audit report to city council Tuesday morning.
Overall, the firm gave the city an unqualified opinion, Valentini said.
"An unqualified opinion is about as good as you can do," said Mayor Tommy Roberts. "The audit confirms that the management of our financial accounts is outstanding."
Each year, the city's finance division prepares data for audit submission, said Eric Schlotthauer, the city's controller.
The audit ensures that the city complies with sate law, but is also integral in preserving the city's high financial rating, he said.
"It helps a lot to have an unqualified opinion," Schlotthauer said.
In addition to its unqualified rating, the firm cited the city's financial achievement in receiving the "Government Finance Officers Association Certificate of Excellence in Financial Reporting" for fiscal year 2011, which was the 18th consecutive year for Farmington.
Of nine award recipients in New Mexico, only three were cities, including Farmington, according to the report.
Although the firm found the city to be in good standing overall, it identified seven areas that need improvement. Included were the lack of a formal information technology disaster recovery plan, gaps in accounting for a Federal Emergency Management Agency project and late submission of a grant for the East Pinon Hills Bridge and Extension project.
The issues have all been resolved, or are in the process of being resolved, according to the report.
Moss Adams' audit is designed to be a preliminary examination, not a forensic investigation to identify criminal financial activity.
And it was not clear whether the audit would identify misappropriation of funds, embezzlement or other significant financial wrongdoing.
Those kinds of cases have cropped up in the Four Corners area recently with last year's Convention and Visitors Bureau embezzlement case, the ongoing New Mexico Title investigation and the recent revelation of embezzlement at the Bloomfield Motor Vehicles Department.
"This audit does give us some comfort level that there's no reason to be alarmed ... no red flags (were) raised," Roberts said.