Union County audit returns clean opinion; water and sewer metrics show improvement

Union County officials received an unmodified (clean) audit opinion for the fiscal year 2024 comprehensive annual financial report at the Board of Commissioners meeting on Jan. 21, 2025.

The audit presentation by Dan Gaugherty, audit director at Cherry Bekaert, said the firm issued unmodified opinions on the county’s financial statements and found no material weaknesses or significant deficiencies. “We issued unmodified opinions in all cases,” Gaugherty said during the presentation.

County Chief Financial Officer Beverly Lyles walked commissioners through major year‑over‑year changes and operational implications. The county’s government‑wide net position totaled about $421 million at June 30, 2024, a decrease of roughly $11 million from the prior year, Lyles said. Cash and investments declined by about $76 million as bond proceeds were spent on capital projects, and capital assets rose by about $25 million, driven in part by the Southwest Regional Library and the completion of the Yadkin regional water plant and intake.

The auditor and finance staff highlighted two metrics for the water and sewer enterprise fund. The quick ratio for the enterprise rose from about 2.9 in 2022 to about 5.14 in 2024, reflecting stronger current assets relative to current liabilities; Gaugherty said the number is a liquidity indicator where higher is better. Lyles said the county’s water‑and‑sewer “asset condition” metric — the inverse relationship of accumulated depreciation to gross asset value — improved from about 0.51 in 2023 to 0.67 in 2024, a change she attributed to recent capital investments and to the Yadkin plant coming fully online.

Commissioner Gary Sides asked specifically whether higher connection fees or new assets drove the improved measures; Lyles pointed to asset additions and lower liabilities as drivers and flagged that some gains reflect newly capitalized infrastructure such as the Yadkin plant. Gaugherty explained construction in progress accounting and said newly completed infrastructure increases reported depreciation. “We did not note any audit adjustments,” Gaugherty added, noting the financial statements presented for audit were essentially the same as those provided by management.

On fund balance, Lyles explained the county moved certain restricted sales‑tax receipts for school capital and debt out of the general fund in the recent fund reorganization. Because sales tax receipts are collected with a three‑month lag, she recommended the board avoid spending all unassigned general‑fund balance so the education debt fund does not go cash‑negative during the lag. She told commissioners the education debt fund showed a negative unassigned balance in the audited results that was offset in part by assigned debt premium proceeds.

Other highlights from the audit presentation: the county had no reported fraud, no statutory violations or late debt payments, and no corrected audit adjustments. The county’s water and sewer fund reported operating revenues of about $77.4 million and operating expenses of about $72 million, including roughly $30 million of depreciation tied to newly capitalized assets. The fund recognized approximately $17.2 million in contributions, which Lyles later said broke down to about $6.5 million in system development fees and about $10.3 million in developer‑donated infrastructure.

Why this matters: a clean audit supports the county’s financial credibility with lenders, grantors and the public; improved water and sewer asset metrics indicate the county’s recent capital spending is increasing recorded asset life, but staff cautioned that metrics can decline in years when capital investment is lower. The finance team recommended protecting liquidity as the county continues to spend bond proceeds on school and utility projects.

The board did not take a formal vote on the audit presentation itself; commissioners asked follow‑up questions and staff said the full ACFR and a condensed Popular Annual Financial Report will be available online for public review.

The county manager and CFO said staff will provide follow‑up materials and additional breakdowns (for example, cash vs. noncash contributions to the water and sewer fund) on request.