External auditors give City of Fate clean ACFAR opinion for FY 2024

Auditors presenting the city’s Annual Comprehensive Financial Report (ACFAR) for the fiscal year ended Sept. 30, 2024, told the Fate City Council on March 3 that they would issue three unmodified opinions and had no reportable findings.

“We’re going to give you an unmodified opinion,” Josh Finley, lead engagement director for the audit firm, said. He told the council the single-audit work—required because the city expended more than $750,000 in federal funds—also produced clean opinions for internal controls and compliance related to federal awards. Finley said the city spent about $2.5 million in ARPA funds.

Finley highlighted several commonly reviewed accounting estimates, including accounts receivable allowances, pension and OPEB liabilities reported from the Texas Municipal Retirement System (TMRS) and depreciation estimates. He said the auditors proposed some outsourced adjustments related to pension and OPEB but found no material weaknesses or significant deficiencies in internal control.

The auditors noted financial highlights the council heard: the city’s unassigned general fund balance at Sept. 30, 2024, was just over $8.1 million, representing about 46.9% of the city’s budgeted FY 2025 expenditures. The audit team reported the city’s TMRS net pension liability was about $191,000 on the actuarial measurement date and said the system was roughly 97% funded on the measurement date.

Finley also covered upcoming Governmental Accounting Standards Board (GASB) pronouncements (Statements 101–104) that will change certain disclosure and reporting formats in future years and reminded the council about cybersecurity as an important risk area to monitor. He noted the city had received a Certificate of Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for 11 consecutive years and said he expected the city to qualify for a twelfth year after submission.

Council members asked questions about fraud, internal controls and reserve policy. Finley responded that auditors found no evidence of fraud or misuse of funds and described examples of minor deficiencies (for example, an administrative item such as a bank rec missing a second review signature) that would be handled outside the council meeting. Council members praised Raju and the finance team for the department’s work.

The presentation was informational; the council and auditor did not take a formal vote during the meeting on the audit presentation itself. The auditors said they will publish the audit to the city website and distribute required reports to state and federal agencies.