Council accepts FY2024 audit; auditors issue unmodified opinion but note a material weakness in controls

The Pflugerville City Council voted to accept the fiscal year 2024 audit, which covers the year ending Sept. 30, 2024. Auditor Brandon Tran of Weaver and Tidwell told council the firm issued an unmodified (clean) opinion on the financial statements but included an emphasis of matter for a prior period adjustment and identified both a material weakness and a significant deficiency in internal control over financial reporting.

Tran summarized the auditor’s conclusions: “We have issued an unmodified opinion,” and added that the audit identified a significant deficiency and a material weakness. The report also concluded the city’s single audit of federal program expenditures (including ARPA CLFRF funds) found no instances of noncompliance.

Audit findings described to the council included: insufficient segregation of duties in the finance office, created in part by turnover and temporary understaffing that left an employee with the ability to create vendors and issue checks without a second‑party approval; and material adjustments the auditors required to record retainage payables on construction projects, recognize notes payable related to a development corporation (PCDC) agreement, and post a prior‑period accounts receivable adjustment related to the solid waste fund.

Tracy Waldron, the city’s finance director, was present for the presentation and staff discussion. The auditors noted the city has already taken steps to strengthen security procedures and internal controls and that staffing levels have improved since the audited year. As Tran described the prior‑period adjustments and retainage, he said the city will post the entries and implement year‑end procedures to better capture these balances.

Council members pressed auditors and staff for additional presentation and transparency changes. One councilmember requested quarterly financial statements and more time to review audit materials in future years, saying, “I would like to see quarterly financial statements ... and a monthly budget to actual on the consent agenda.” Staff and auditors agreed to consider presentation changes to make the statements clearer to the public, including separating current and noncurrent classifications and providing budget‑to‑actual schedules by natural classification where feasible.

After the presentation and Q&A, a resolution to accept the FY2024 audit was moved, seconded and approved by the council.

Key financial highlights explained in the audit presentation include an excess of revenues over expenditures of about $18 million for governmental funds (driven largely by spending down capital project and bond funds), an ending governmental fund balance of about $495 million (about $21 million unassigned), operating income of about $20 million for proprietary funds, and a government‑wide net position increase of about $25 million.

The council directed staff to consider the requested transparency changes and to provide additional information on staffing and the corrective actions already under way.