Independent auditors give Llano City an unmodified opinion for year ended Sept. 30, 2024

Llano City received an unmodified audit opinion for the fiscal year ended Sept. 30, 2024, the city’s external auditors reported to the council.

Jonathan Watson of Brooks Watson and Company presented the audit and told elected officials the unmodified opinion is the highest level of assurance an auditor can provide. "Good news, the city's receiving an unmodified opinion," Watson said, adding the result reflects the work of the finance department and city staff.

Key financial highlights the auditors reported included total assets exceeding total liabilities by about $35.75 million; an overall increase in net position of approximately $1.35 million; and a combined governmental fund balance of about $3.676 million, an increase of roughly $357,000 from the prior year. The unassigned general fund balance was reported at about $2.8 million, equal to roughly 48% of annual general fund expenditures — near the Government Finance Officers Association’s recommended 2-to-6 months of spending.

The auditors also presented revenue and expense breakdowns: total governmental revenues were about $5.666 million, with sales and property taxes each representing about 25% of governmental revenues; charges for services made up about 26%. Total governmental expenses were about $6.584 million, with parks and recreation, public safety, general government and public works each significant functions.

Watson reviewed the utility system and pension information: the utility system had operating income of about $1.748 million and a year-over-year increase in net position of about $729,000. The city’s net pension liability decreased to about $1.279 million, and the pension funded ratio rose to about 88% from 84% the prior year. Watson noted contribution rates have decreased slightly to 12.79% of payroll for the most recent plan year.

Watson outlined two standard audit letters — an independence/estimates letter and an internal control letter — and noted that there were few audit adjustments. He also reminded the council of an upcoming Governmental Accounting Standards Board pronouncement on accounting for paid time off that the city must adopt for the year ending Sept. 30, 2025.

Council members thanked finance staff for improvements in timeliness of financial statements and asked the auditor for high-level guidance on areas to monitor; Watson said auditors focus on recording and presentation and that qualitative judgments about staffing or program needs are outside the auditor’s scope.

No formal action was required; the audit was presented to the council and entered into the record.