Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the County Finance Audit topic
No spam. Unsubscribe anytime.
Davidson County auditors give 'unmodified' opinion; report flags sewer fund transfers and budget violation
Summary
Auditors issued an unmodified opinion on Davidson County's 2024 financial statements but the Local Government Commission (LGC) performance indicators and the audit identified issues tied to sewer-fund transfers, a budget ordinance violation and a compliance finding.
Beau Hildebrand, presenting the 2024 audited financial statements for Martin Starnes & Associates, told the Davidson County Board of Commissioners on Jan. 2 that the firm issued an unmodified (clean) opinion on the county's financial statements.
Hil debrand said the county reported about $205 million in general fund revenue for fiscal 2024 and total general fund expenditures of about $166 million. He told commissioners the county's total general fund balance was roughly $138 million and that the “available” general fund balance used by the LGC was about $118 million, giving an available-fund-balance ratio of about 49.54% for 2024.
The audit and LGC data‑input sheet also flagged issues commissioners should expect to respond to, Hildebrand said. He identified three items that will require board attention: a negative operating net income indicator for the county’s sewer enterprise fund driven by debt-service transfers in, a detection that transfers into that fund exceeded 3 percent (which LGC treats as a performance concern), and an adopted‑ordinance–level budget violation that led to an audit finding for over‑expenditures and a related compliance significant deficiency.
County staff explained the context behind the fund‑balance movement: county leadership used roughly $32.5 million in ARPA funds in earlier years for operating expenses, then later transferred those dollars into capital reserve, which mechanically reduced the available‑fund‑balance percentage when compared with amended expenditures. A county staff member summarized the effect: because the transfers increased expenditures in the amended budget, the available‑fund‑balance percentage fell even though the dollar reserves were used for planned capital purposes.
On enterprise funds, auditors reported stronger liquidity in the sewer fund’s quick ratio (about 3.43) but the LGC still lists a performance indicator for the sewer fund while the outstanding sewer debt remains. Auditors noted outstanding governmental debt of roughly $167 million as of June 30, 2024, and annual debt service of about $15 million.
Auditors praised county finance staff for facilitating the audit and said they expected the Local Government Commission would issue its final review in January. Commissioners asked for additional breakdowns used in the LGC comparisons and a standard “cost of government” comparison for the county to be provided after the meeting.
Ending: County staff said they would supply commissioners with follow‑up materials, including LGC data worksheets and comparative state metrics, and prepare responses required by the LGC for the performance indicators and the budget‑violation finding.
