City receives unmodified audit opinion for fiscal 2024; general fund shows budget shortfall

An independent auditor told the El Campo City Council on Tuesday that the city received an unmodified audit opinion for the fiscal year ended Sept. 30, 2024.

John Watson, an auditor with Brooks Watson and Company, told the council the unmodified opinion means “there are no material errors or inconsistencies in this report we're aware of.” He said total assets exceeded total liabilities by roughly $23.1 million and the city had an overall decrease in net position of about $1 million for the year.

Watson said the city's governmental funds reported a combined ending fund balance of about $8.6 million and that the unassigned fund balance in the general fund was $3,745,035 — about 29% of annual general fund expenditures, or roughly three months of reserves. He also summarized revenue and expense trends: total governmental revenues were about $13.2 million (down slightly from $13.7 million the prior year), and total governmental expenses were about $15.7 million, with public safety accounting for roughly 49% of those expenses.

Watson reviewed budget-to-actual activity for the general fund and said the city budgeted a deficit of $1,296,000 but recorded an actual deficit of $1,795,000 after revenue shortfalls and higher expenditures. He noted proprietary funds (the utility and EMS funds) were operating at a surplus before transfers.

Courtney, the city manager, told council that more recent, post-audit receipts affected the fund balance numbers; for example, a reimbursement described as a hurricane-related payment arrived in the current fiscal year and influenced more recent totals. Watson stressed the audit covered the period ending Sept. 30, 2024, and that later receipts are not reflected in the audited numbers.

Council did not take formal action on the audit. The mayor noted “no action is required” and that the council was being asked only to receive the report. The audit report and supporting letters — including a letter of proposed audit adjustments and a letter with internal-control suggestions — will remain part of the city’s annual report and available on the city website.

The auditor said management adopted all proposed adjustments and that no uncorrected misstatements remained.