Town audit: unmodified opinion; general fund reserves near five-year highs

Thompson, Price, Scott, Adams and Company presented the Town of Smithfield’s 2023–24 audit to the council on May 6 and issued an unmodified (clean) opinion on the town’s financial statements.

Lead auditor Allen Thompson told the council, “we issued an unmodified report,” and said the audit found appropriate accounting policies, estimates and disclosures. Thompson pointed to strong liquidity and reserve metrics: the general fund’s total fund balance was reported at about $22.8 million, an unassigned fund balance of $17.6 million (about 110.3% of expenditures reported for the presented years), and an overall fund-balance-available percentage near 124.65%. Property tax collection for the year was 99.93%.

Thompson also explained two matters the town must address in its response: a late submission of the audit report this year (described as a “blip”) and a correction of an error involving receivables in the proprietary funds and government-wide statements related to the billing cycle. Thompson said management provided a representation letter dated March 28 and there were no disagreements with management.

Council members praised staff for the financial results and the auditors emphasized that the town’s business-type activities (water, sewer, electric) showed positive cash flow in the audit period and substantial fixed assets in the water/sewer fund. Thompson noted that “cash flows” — not just net position — are important for business-type activities.

No formal council action was required on the audit presentation; auditors answered council questions about analysis charts and the group-weighted average comparison used by the Local Government Commission.