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Independent audit: Friendswood receives unmodified opinion for fiscal 2024; fund balances fell as planned for capital projects
Summary
External auditors issued an unmodified opinion on Friendswood's 2024 financial statements. The city reported $322.4 million in assets and a government-wide net position of $159.4 million; ending fund balance declined largely due to bond construction and hurricane-related expenditures that are expected to be reimbursed.
Auditors from Whitley Penn presented the city’s annual comprehensive financial report for the fiscal year ending Sept. 30, 2024, and issued an unmodified opinion — the highest level of assurance — that the financial statements are fairly stated and in accordance with generally accepted accounting principles.
Nupay Garcia of Whitley Penn told the council that total assets and deferred outflows of resources were $322.4 million at year end, and total liabilities and deferred inflows were about $163.0 million, leaving a net position of approximately $159.4 million. The report noted long-term liabilities decreased $11.7 million from the prior year driven by regularly scheduled principal payments on bonds and notes payable.
The fund financial statements showed an ending combined fund balance of $45.3 million, a decrease from the prior year of $11.5 million primarily because the bond construction fund completed several drainage projects during the year. The general fund reported a $3.4 million decrease in fund balance, which staff said relates to hurricane-barrel expenditures the city expects to be reimbursed in a later fiscal year.
Garcia said the city earned the unmodified opinion after standard audit procedures and that auditors found no misstatements that required adjustment and no disagreements with management. She reminded council that significant estimates reported in the financial statements — primarily pension and OPEB liabilities related to the city’s TMRS participation — are based on actuary reports and can change over time.
Council members asked clarifying questions about the timing of expenditures, multi-year project accounting and how the budget variances were reported. Staff and auditors explained that some projects span fiscal years, and that final actual expenditures were $4.7 million less than the final budgeted amount because some project expenditures were deferred into the following fiscal year as planned.
The auditors noted no audit difficulties and thanked staff for cooperation during fieldwork and year-end testing.
