Auditor delivers clean opinion; flags two internal-control recommendations and ARP spending

Blankenship CPA Group partner Bob Adams told the Town of Nolensville Board of Commissioners on July 28 that the auditor's report for fiscal year 2024 contained a clean opinion on the town's financial statements but included two findings about data-management and monitoring following a recent software conversion.

Adams said the audit covers three main areas: the financial statements, limited evaluation of internal controls as they relate to the financials, and federal award testing under Uniform Guidance. He told commissioners the firm performed a federal grant audit because federal award expenditures exceeded the $750,000 threshold for single-audit reporting; the major program tested included American Rescue Plan Act (ARP) funds used primarily for the town's fire hall.

Why it matters: the audit is the principal independent statement about town finances available to lenders, grantors and the public. A clean opinion indicates the town's financial statements are fairly presented, while the findings point to internal control areas management should strengthen.

Key numbers and findings - Total assets at the end of fiscal 2024 were presented at about $65 million, with $18 million in liabilities and roughly $47 million in net position, a year-over-year increase of about $2.6 million. Adams cautioned that those balance-sheet totals include capital assets and long-term debt and are not the basis for operating budgets. - The town's governmental fund balances were near $30 million at year-end 2024, with about 30% of that in unrestricted fund balance, Adams said. - The audit showed roughly $2.1 million in federal grant expenditures during the year; the firm's Uniform Guidance testing found no reportable federal-grant findings. - Adams said about $1.5 million in ARP funds were spent in 2024, primarily for the fire hall, and that the town still had about $138,000 of ARP funds remaining to spend, with an expiration date of December 31, 2026.

Internal controls and follow-up Adams said the audit identified two relatively narrow recommendations tied primarily to the town's data-management and monitoring after a Tyler Technologies conversion roughly two years prior. He said auditors and management have met repeatedly and that the town has made clear progress on the items since the prior year. Adams also warned of an increasing audit-area risk nationwide: cybersecurity and the financial risks that a breach could create.

Questions from commissioners When asked whether recent internal-control changes implemented by staff would have addressed the payroll-tax related item in the audit, Adams said the town had been proactive in addressing IRS-related matters but that some items require time to resolve. He described the auditors'work with management as focused on catching and remediating breakdowns more quickly.

What the town said and next steps Town staff acknowledged the conversion issues and said they have been working with auditors to implement fixes. Adams said the 2025 audit is already underway and noted a new accounting standard will increase the compensated-absences liability reported in next year's statements; that change does not affect the town's budget process but will change certain balance-sheet estimates.

Ending Adams said the final audit report has been posted on the State Comptroller's site and reiterated the firm's view that, while the audit found two narrow control items, documentation, approvals and staff engagement overall were strong.