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Auditors give Fairhope an unmodified opinion; city assets and restricted funds rise, single-audit flags airport reporting timing
Summary
Auditors reported an unmodified opinion on the city's 2024 financial statements, citing increases in assets and cash driven by unspent 2024 bond proceeds and federal grants; the single-audit noted one significant deficiency tied to late reporting for an airport improvement grant handled by a third party.
Lee Parks, the engagement member for the auditing firm, told the Fairhope City Council work session that the city's independent auditors issued an unmodified opinion on the 2024 financial statements dated March 12, 2025.
Parks presented high-level figures: total citywide assets of about $355.3 million (up roughly 15 percent year over year), liabilities of about $77.2 million (up about 34.6 percent), and net position of about $278 million (up about 11.4 percent). Total cash was reported at $88.1 million, which Parks said resulted in part from unspent bond proceeds tied to 2024 water and sewer warrants.
On revenues and expenditures, Parks said total property taxes were about $10.1 million (up roughly $1.5 million), sales taxes were $15.3 million (up about $520,000) and intergovernmental revenue rose to $9.5 million, largely because of federal funds tied to the Gulf Coast oil-spill response. Parks said business-type activity additions included roughly $14 million for water and sewer improvements.
The presentation included the single-audit (Uniform Guidance) results. Parks said the city spent about $10.2 million in federal funds in 2024; roughly $6.4 million was associated with Gulf Coast oil-spill programs and about $2 million with the ALDOT Airport Improvement Project. The single-audit reports received unmodified opinions, but Parks identified one significant deficiency: certain reports for an airport-improvement grant were not filed on time. He emphasized that the finding related to reporting timeliness and was largely tied to a third party that prepared and submitted the reports; Parks said management has corrected the deficiency.
Parks also noted that no material weaknesses were reported for 2024 and that the auditors' peer review (dated Jan. 4, 2023) showed no significant weaknesses in the firm's control processes.
Council members asked technical questions about depreciation schedules and capital-asset lives for sewer improvements; Parks said those lives vary by asset type and confirmed a 50-year life for the sewer improvements referenced in discussion.
This was an informational presentation of the audit and single-audit results; no council vote or action on the audit report was recorded during the work session.
