North Kingstown council receives unmodified 2024 audit; town finance director reports stronger-than-expected balances

The North Kingstown Town Council voted to receive and file the town's 2024 financial audit and heard a presentation from the auditor and the town's finance director about the town's fiscal position.

Markham auditor Kyle Connors told the council the firm issued an unmodified audit opinion for fiscal 2024, meaning the firm found the financial statements free of material misstatement. "A lot of work goes into putting this together and having this ready for you and issued in January. That's a huge testament to the town finance department and the school business team," Connors said.

The audit and finance report showed the general fund's unassigned fund balance increased by about $2.6 million, leaving an unassigned balance of roughly $18.2 million, or 17.3% of the town's operating budget as of June 30, 2024. Connors said a 16—?% range is generally viewed as healthy. He also reported that the town collected 99.2% of current-year property taxes and that general fund revenues exceeded budget by about $4.0 million, including roughly $1.4 million from stronger-than-expected property tax collections and $1.5 million from investment income.

On the school side, Connors said the school's unrestricted fund ended with an assigned fund balance of about $6.8 million (about 8.9% of the school operating budget) and that the school spent approximately $1.9 million in federal ESSER funds in 2024; those federal ESSER funds were not expected to recur in future years.

The audit committee chairman, Jeff Wadovic, told the council the committee reviewed the audit in detail and expressed confidence in the finance department's work and the audit firm's presentation. "Kyle did a very good job of pointing out that the town is extremely healthy in three of the four pension areas," Wadovic said, and he cautioned lay readers about interpreting government-wide statements that include long-term pension and OPEB liabilities.

Connors identified one current-year finding categorized as a material weakness in the sewer fund: the fund was carrying future unbilled receivables as both an asset and a liability. The auditor removed both the asset and the liability and said the correction did not affect the fund's reported revenue or net position but was a balance-sheet cleanup. The audit report also recommended continued cybersecurity training and vulnerability testing.

Council and staff discussed pension funding and retiree healthcare (OPEB). Connors said the town's three town pension plans (general, police, fire) were each funded above 80%, while the teacher plan was funded at about 65%. The town's OPEB trust was funded at about 18.2% with a total OPEB liability cited near $14 million.

Following the presentations, the council voted to receive and file the audit report.

Votes at a glance - Motion to continue agenda item 6 to the next meeting: passed (motion made and seconded; "ayes have it"). - Motion to receive and file the 2024 audit report: passed (voice vote; "ayes have it").

Why it matters: The unmodified opinion affirms the town's financial statements for 2024, the general fund's unassigned balance provides a multi-month operating cushion, and the single audit finding identifies a discrete sewer fund reporting issue. Council members and the audit committee noted those facts while urging continued attention to cybersecurity, pension/OPEB liabilities and budget planning for 2026.

The audit committee chairman said the committee will meet again with school staff on Feb. 11 and that the committee is available to answer council questions as the town prepares budgets this year.