Waynesville council accepts FY2024 audit; auditors note seven items needing LGC response

The Town of Waynesville council voted to accept the town's FY2024 audited financial statements after an outside auditor presented the results and recommended follow-up steps.

Tanya Coffey, who presented the audit for the firm on behalf of the absent lead auditor, told the council the firm issued an unmodified opinion on the financial statements and highlighted a $1.8 million overall increase in the town's fund balance for fiscal 2024. Coffey said the top three revenue sources'ad valorem taxes, other taxes and licenses (largely local option sales tax) and sales and services'accounted for roughly $13.9 million of the town's $17.2 million in total revenues. She said the town's property tax collection rate rose slightly to about 99.36%.

The auditor also flagged several performance indicators the Local Government Commission (LGC) uses to evaluate local governments. Coffey said there were seven items the town must address in a written response to the LGC within 60 days, including a capital asset condition ratio for the water and sewer funds (affected by a large construction-in-progress balance), quick ratios below the LGC's preferred threshold for combined water and sewer, and a set of findings in the compliance section such as segregation-of-duties weaknesses, a late audit issuance, a period in which an interim finance officer was not bonded, one instance of deposits not being made timely, and certain budget violations.

Coffey said, "We issued an unmodified opinion on these financial statements," and described the seven items as matters the town should explain to the LGC with forward-looking corrective actions. She also offered to review the town's draft response before it is submitted.

Council members asked staff for clarifications about the timing and cause of the findings. Finance staff and other town staff confirmed most of the findings related to the period before current staff were in place and said several had already been remedied, including updated controls for journal-entry approvals and daily deposit practices. The audit presentation noted roughly $22 million recorded as construction in progress for the wastewater project as of June 30, 2024, which the auditor said materially affects several ratios until assets are placed in service.

After the presentation, the council voted to accept the audit and approve the FY2024 audited financial statements. The motion to accept the presentation and approve the full-year '24 audit was moved and seconded by council members; voting was taken by voice and the motion carried.

The council directed staff to prepare the written responses required by the LGC describing each item, its cause, and the town's corrective measures and to file that response within the statutory timeframe.

The audit presentation and council acceptance concluded with a reminder from the auditor about the statutory deadlines and the availability of staff to provide additional details on the compliance findings and corrective steps.