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Terrell releases FY24 unaudited financials; council questions utility fund shortfall and audit timeline
Summary
City finance staff presented unaudited FY24 summaries to the council, reporting overall close performance to revised budgets but noting the utility fund ended the fiscal year with an approximate shortfall of about $141,000; council asked for further detail and staff outlined plans for audit timing, staffing changes and training.
Terrell’s director of finance presented the city’s unaudited fiscal year 2024 financial summaries to the City Council on Feb. 11, reporting that overall fund performance closely tracked the revised budget but that the Utility Fund ended the year with an approximate shortfall of about $141,000 compared with the revised budget.
Shelley Wallace, director of finance, said revenues and expenditures across most funds ran roughly 99% of the revised budget. The Utility Fund showed revenue below the revised estimate while expenditures were close to expected levels, producing the reported year‑end deficit for FY24. Council members pressed staff for clarity about causes and next steps.
Staff and council discussed several drivers behind the utility variance, including weather‑related demand variation (a wet late summer reduced irrigation water usage), timing differences between adopted and revised budgets and capital project timing. Assistant City Manager Mark Mills and Wallace said the budget was revised in midyear to reflect then‑known revenue and expenditure trends; council was told the revised budget creates tighter, more realistic comparisons to actuals than the originally adopted budget.
The council asked for and received additional operational and staffing commitments: finance staff are recruiting an assistant director of finance to increase capacity and reduce single‑person dependencies; the city will host a Texas Municipal League (TML) / external financial services boot camp on the finance team in late February to improve processes; and staff aim to begin the FY24 audit work in March, with a goal to provide an audited financial report to grantors and stakeholders as soon as practical (staff said June is the desirable target and March is an aspirational long‑term target).
Council members also discussed audit oversight practices. Staff and councilors agreed to research rotating audit teams/firms periodically to get fresh external review and to report back with procurement/timing options. Council asked staff to return supplemental reports that break down the Utility Fund shortfall by specific line items, show final audited results when available and outline the plan to restore the utility reserve balance.
No formal council action was required beyond direction to staff to follow up; staff committed to returning post‑audit reports and to present monthly financials (with a target of delivering April financials at the April meeting and reducing the production lag over time).
