Pittsboro receives clean 2024 audit; one compliance finding tied to lease accounting

Chase Sharp, partner in charge of the town—s audit, told the Board of Commissioners on Jan. 13 that Pittsboro—s 2024 financial statements received an unmodified opinion from the independent auditor.

Sharp said the audit was submitted to and approved by the Local Government Commission by the filing deadline. "The town once again received an unmodified opinion on the financial statements," he said. He described the firm—s work as a three-phase process of planning, field work and wrap-up and said the auditors used a risk-based approach that focused on high-risk reporting areas such as cash, revenues and expenses.

The only item the auditors reported as requiring formal communication to the board was a single compliance finding tied to the new lease accounting standard. "One compliance finding had to do with the overexpenditure of the budget," Sharp said, explaining that the new standard requires certain long-term leases to be recorded as liabilities, which affects budgeting and requires appropriate budget amendments.

Finance director Heather Meacham and board members asked questions about practical effects. Sharp said the leases now appear as future liabilities on the balance sheet and that lease payments reduce that liability over time. He confirmed that any long-term leases over a year need to be recorded under the new standard.

Sharp also presented trend analysis dating to 2015 showing revenue growth and a rising fund balance. He said unrestricted general-fund balance at year-end 2024 exceeded $5 million, representing roughly 54% of 2024 expenditures, and that unrestricted cash reserves equaled about 222 days of operations.

Meacham and commissioners noted the town—s sizeable reserves and said they helped during the pandemic and provide flexibility for future downturns. No board action was required to accept the audit presentation; the board later approved the town—s required FPIC (financial performance indicators of concern) response letter related to the audit submission.

The presentation included routine audit adjustments and a separate auditor communications letter that discussed accounting-policy changes and the town—s significant estimates (capital asset lives and allowance for doubtful accounts). Sharp said there were no disagreements with management and no difficulties encountered during the audit.

Ending: The board closed the discussion by thanking staff for their work. Finance staff will continue to monitor and adapt budgets to reflect the lease accounting change and other operating considerations.