Highland Village receives clean audit; general and utility funds report healthy reserves

Jacob, an external auditor who traveled from Waco to present the results, told the Highland Village City Council on March 25 that the city's annual comprehensive financial report and single-audit yielded a "clean opinion" and no internal-control deficiencies.

The audit presentation matters because independent audits test whether local governments follow generally accepted accounting principles and federal grant rules. Jacob said the firm confirmed cash directly with banks, reviewed internal controls and federal grant compliance, and found "no noncompliance, no issues or questioned costs" in its testing of American Rescue Plan Act (ARPA) expenditures.

Jacob highlighted a few financial metrics from the ACFR. At Sept. 30, 2024, the general fund had a fund balance just over $11.6 million, with about $9.3 million unassigned — roughly 38% of annual spending, he said, exceeding the city's stated target and the Government Finance Officers Association's 30% guidance. The utility fund also reported strong position, with about 75% of a year's unrestricted fund balance available after excluding debt and capital assets, Jacob said, and consistent positive operating cash flow.

Finance staff and the audit firm emphasized the administrative work that supports the result. Jacob praised the city finance team and the auditors' engagement, and Finance Director Heather (named in the presentation) and council members thanked staff for preparing documentation and responding to audit requests.

On the agenda, acceptance of the audit report was bundled with other consent items; council approved the consent agenda 7-0, which included receipt of the ACFR for fiscal years 2023 and 2024. The council did not take additional action stemming from the audit presentation during the meeting.

The presentation also noted operational items relevant to residents: the single-audit covered federal grants (notably ARPA) because the city exceeded the federal single-audit threshold in prior years; auditors indicated ARPA testing was likely the final required single-audit cycle for those funds. The audit's statistical tables and the management discussion and analysis in the ACFR were highlighted as useful sources for year-over-year and 10-year trend information.

The council placed acceptance of the ACFR on the consent agenda; the motion to approve the consent items was made and seconded during the council meeting and passed 7-0. Staff said a minor page-number typo identified during the presentation would be corrected before a GFOA submission.

Ending: The audit presenter closed by reiterating the clean opinions and thanking staff. Council members and the mayor thanked finance staff for the work that produced a report the auditors described as "very easy to audit."