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Council accepts auditors unmodified opinion; staff flag water/sewer operating loss and project reimbursements
Summary
Auditor Hannah Leskovec presented an unmodified opinion on the town's 2024 financial statements; council accepted the audit and heard staff cite a water and sewer operating net loss and a $2.7 million receivable related to Main Street work.
Blowing Rock Town Council accepted the town's 2024 financial audit after a presentation by Hannah Leskovec of Scott, Adams & Company; auditors issued an unmodified opinion and flagged several required communications and financial-performance indicators of concern.
Leskovec said the audit opinion was unmodified (the highest level of assurance) with a report date of Dec. 23, 2024, and noted the upcoming implementation of GASB 100 affecting prior-period presentation. She pointed council to subsequent events and required communications in the packet, including estimated repairs from Hurricane Helene of roughly $1,000,000 that the town expects to seek FEMA reimbursement for, and a $2.7 million receipt in July 2024 associated with Main Street water and sewer replacement that appears as a receivable/account payable in the financial statements.
Auditors also identified matters for attention: prior-period adjustments that reduced the general fund beginning balance by about $207,000 (related to a fire-department receivable) and an operating net loss in the water and sewer fund of roughly $220,000. Leskovec described unrestricted cash in the water and sewer fund as effectively 0% while noting a large receivable inflates balances; she said the town's fund-balance metrics had improved, with available fund balance near 47.8% of general fund expenditures.
Town staff and council discussed timing of reimbursements and project billing. Town Manager and finance staff said the town submitted a state reimbursement request in March and received $2.7 million in July 2024; had the funds arrived on June 30, unrestricted cash would have been higher at year-end. The council praised the finance staff for completing the audit during a departmental transition and asked about internal controls; auditors said a financial-statement audit does not constitute a full internal-controls review, which is typically performed separately.
Council voted to accept the audit and to direct staff to address the post-audit items identified in the required communications and FPIs list. Staff said they will provide a more comprehensive update at the upcoming council retreat.
