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City auditors issue clean opinion; general fund reserve about $5.2 million
Summary
External auditors told the Mineral Wells City Council they issued an unmodified opinion on the city's financial statements, reported roughly $5.2 million in unassigned general-fund balance, and found no material noncompliance in federal grant testing; council voted 6-0 to accept the audit.
Auditors from Keller Brown & Hill presented the city's annual financial audit and told the Mineral Wells City Council they issued an unmodified opinion, finding no material misstatements in the financial statements and no material noncompliance related to federal grant testing.
The auditor said the General Fund had an unassigned fund balance of about $5,200,000, which the auditor described as roughly three and a half months of general operating expenditures. The auditor also highlighted enterprise activity: the Water District issued significant debt during the year and posted substantial capital activity tied to the Turkey Peak project.
On the single-audit portion, the auditors said the city spent above the federal threshold on one program (ARPA) and that testing showed no instances of material noncompliance or internal-control weaknesses related to compliance. "We did not find any instances of material noncompliance," the auditor said.
City staff later noted that when certain items the council had set aside in the budget are included the combined fund-balance picture approaches roughly $5.3 million, or about 31% of expenditures of $16,160,000, a level above the council's 25% policy. Staff and the auditors discussed the need to avoid using fund balance for recurring costs and the need to reconcile interfund transfers when preparing the next budget.
Council asked about policy improvements; the auditors recommended better coordination with the separately audited Water District to reconcile interfund and inter-entity transactions earlier in the process. The auditor said differences were reconciled but generated additional end-of-audit questions.
After the presentation the council moved to accept the auditors' report for fiscal year 2023-24; the motion passed 6-0.
