Independent audit gives The Colony an unmodified opinion, flags prior‑year restatements

The city’s new auditing firm, Eide Bailey, issued an unmodified audit opinion on The Colony’s financial statements for the fiscal year ended Sept. 30, 2024, while reporting restatements to a small number of prior‑year balances and recommending strengthened reconciliation procedures.

Kevin Randolph, the firm’s engagement partner, told the council the audit produced an unmodified opinion — the standard “clean” opinion under generally accepted accounting principles — but that auditors identified prior‑year errors that required restatement. The restatements corrected capital asset records (including previously unrecorded or misstated capital assets), a roughly $137,000 accounts‑payable item in a capital projects fund that appeared to be outstanding for several years, and an insurance‑related prepaid asset tied to bonds issued by the Colony Local Development Corporation that had not been amortized over the life of the related debt.

“We did issue an unmodified opinion on the financial statements,” Randolph said. He added that management is responsible for the statements and internal controls and that the city has implemented additional reconciliations and staff to reduce the risk of similar errors in the future.

Randolph presented key fiscal figures: total governmental fund cash and investments of roughly $70.2 million and total governmental fund assets of about $82.5 million; total governmental fund balance of $57,084,818; and an unassigned general‑fund balance of $35,930,912 — approximately 67% of general‑fund expenditures, which the auditor described as a healthy reserve level. Fund balance declined from about $75.2 million the prior year, a change Randolph said was largely due to capital‑projects spending and timing.

The auditor also reviewed the water and sewer enterprise fund, reporting total assets of about $190.7 million, long‑term liabilities near $52.2 million and charges for services revenue of roughly $29.4 million for the year; the enterprise showed a positive change in net position for the period.

Because the city expended more than $750,000 in federal aid, auditors conducted a single audit of the Coronavirus State and Local Fiscal Recovery Funds program (SLFRF). Randolph said the single audit found no instances of noncompliance and no internal‑control findings related to the tested federal program.

Councilmembers asked whether the restatements would affect the city’s credit ratings. Randolph said the corrections did not meaningfully harm debt metrics and were related to prior‑year accounting treatments; the city also increased reconciliation procedures and staffing. Mayor and city staff publicly praised the finance department for preparing records and working with the new auditors.