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Auditor issues clean opinion on Hilton Head Island FY24 finances; single finding for OPEB disclosed
Summary
Independent auditors issued an unmodified opinion on the town's fiscal year 2024 financial statements, saying town finances are in healthy condition. Auditors reported one finding: an other post-employment benefits (OPEB) plan liability of about $3.7 million that had not previously been on the town's government-wide statements.
Trey Scott, a partner with Mauldin & Jenkins, told the Town Council on Jan. 14 that the firm issued an unmodified—"clean"—opinion on the town's comprehensive annual financial report for fiscal year 2024, meaning the statements "present fairly the financial position and the results of the town's operations" in accordance with generally accepted accounting principles.
The auditors noted one finding in their compliance work: the town had not previously reported an other post-employment benefits (OPEB) plan. Scott said the actuarial liability disclosed this year is about $3.7 million and "we didn't know about the plan until this year which is why it hadn't been reported in the past." He added the finding did not have a bottom-line impact on the town's fund-level information used in daily operations.
Assistant Finance Director John McGowan and the audit team highlighted several indicators of fiscal health. The government-wide statements showed an increase in net position of roughly $51 million for the year; the general fund's fund balance increased by about $6 million and the town had roughly 8.6 months of combined committed, assigned and unassigned fund balance. McGowan said the town's general fund balance and liquidity ratios are "really good indicators of health."
The auditors also reported a roughly $19 million net pension liability for the town's pension plan and said that, while sizable on paper, it is a long-term obligation and the town maintains a positive unrestricted net position even after that liability is recorded.
Councilmembers asked how to avoid future surprises like the OPEB finding. Scott said the plan had "slid under the radar" and recommended management maintain procedures to surface new plans or benefits for audit review earlier.
Council took no formal action; the audit was presented for review and discussion and the council thanked the finance staff and auditors for the report.
