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Auditors issue unmodified opinion on Freeport’s FY2024 financials; several control recommendations offered
Summary
Brooks Watson & Company presented the city’s fiscal year 2024 audited financial statements, issued an unmodified (clean) opinion and reported several findings including disclosure controls, bank reconciliations, utility billing adjustments and a new GASB standard for compensated absences.
Independent auditors Brooks Watson & Company presented the City of Freeport’s audited comprehensive annual financial report for the fiscal year ended Sept. 30, 2024, and issued an unmodified (clean) opinion on the financial statements.
Mike Brooks, partner at Brooks Watson, told the council the firm’s audit produced a clean opinion: “We were able to issue an unmodified clean audit opinion,” he said. Brooks reviewed key financial highlights: property tax and sales tax revenues increased modestly in FY2024, the General Fund ended the year with an unassigned fund balance of approximately $11.2 million (about 56% of annual general fund expenditures), and the Water & Sewer enterprise fund showed a net increase of roughly $4.6 million largely attributable to one‑time contributions and grants.
Brooks also identified recommendations and internal control findings. The auditors described a material weakness related to financial statement preparation: the firm prepared or proposed the adjustments and financial statement disclosures that the city lacked sufficient internal controls to produce independently. Brooks described this as a relatively common finding for municipalities the city’s size and recommended management consider staffing, training or external support to address it.
Other reportable matters included bank reconciliation issues arising from pooled cash accounting, instances where utility billing adjustments were made without prior approval, and errors in implementing approved utility rates in the billing system. Brooks noted the city will be required to adopt GASB 101 (compensated absences) for FY2025 which will increase reported liabilities. He also told Council the city’s TMRS pension plan remained healthy with funded ratios in the 80–92% range over recent years.
Brooks concluded by saying management proposed correcting journal entries and that the auditors’ letters and findings were included in the audit package. Council thanked the auditor and asked staff to follow up on the recommendations and to present responses and corrective steps in upcoming reports.
