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Finance staff: audit nearing completion; $6 million of solar projects will be moved off county capital accounts
Summary
County finance staff told the audit committee the comprehensive financial audit is nearly complete, that beginning net-position balances will be restated to reassign about $6 million in solar projects to school ownership, and that the audited financial report is expected to be presented to the board in December or January.
County finance staff told the Buncombe County Audit Committee that the 2024-25 financial audit is substantively complete and that auditors have identified one finding requiring restatement of beginning balances tied to ownership of solar projects.
The presenter said the county is "95% complete" on the financial audit work and is drafting the comprehensive report for review by external auditors. The staff member told the committee that some solar projects placed in service during the audit period were recorded as county capital assets but contract terms indicate ownership should transfer to the schools; as a result the county expects to reduce capital assets and restate the beginning net position. "There was... about $6,000,000 worth of solar projects that are related to the school," the presenter said, and staff will restate balances to reflect appropriate ownership.
Staff told the committee the accounting adjustment will reduce governmental activities capital assets and net position but does not change the governmental fund balances. The presenter also explained that the county carries school debt on its books while some school capital assets are not recorded on the county's government-wide statements, which contributes to large negative net-position figures that are commonly misunderstood by non-accounting readers.
Regarding timing, staff said the county aims to submit the final audited financial report to the board of commissioners by the end of November but noted the statutory due date has changed and staff may present the audit by the board's December meeting or January meeting if scheduling or federal compliance items require additional time. Staff said the single audit (the audit of federal awards) may remain outstanding if auditors await the federal compliance supplement; in that case staff will present the financial audit and present the single audit separately when it is complete.
Committee members asked for a brief primer on the non-audit supplementary information and the process for compiling the statistical sections that accompany the audited financial statements; staff said auditors review but do not prepare those sections and that county staff compile them. Members requested staff provide a short explanation of the process at a subsequent meeting.
No formal vote was taken on the financial-audit update; staff will continue working with external auditors and return to the committee with the final audit report and supporting schedules.
