Pender County audit yields clean opinion but flags water/sewer finances and LGC reporting requirements

Pender County officials on Tuesday received a clean audit for fiscal year 2024 but were told they must respond in writing to the state's Local Government Commission on several performance indicators affecting the county's utilities.

Val Tao of Martin Starnes & Associates told the Board of Commissioners the independent audit issued an unmodified opinion and found no material misstatements in the county's financial statements. The audit shows the general fund's total fund balance at year-end and an available general-fund balance of about $61.9 million in 2024, down from the prior year.

The auditor highlighted that general fund revenues rose sharply in 2024 (driven in part by higher interest and property tax for school debt service), and that expenditures increased for general government and human services. The presentation also noted that the county's combined water and sewer fund reported an unrestricted net position decline and a quick ratio below the LGC's minimum threshold of 1.0 — a performance indicator that triggers a required LGC response within 60 days of the presentation.

Finance Director Meg Blue told commissioners the apparent utility shortfall largely reflects timing: the county had advanced roughly $13 million to a utility project and has not yet recorded proceeds as receivables because the funds are loans that require LGC sign-off. Blue said the county is working with the LGC and expects the timing mismatch to resolve once proceeds arrive. She also confirmed a previously flagged finance-officer bonding issue was corrected in September 2024.

The audit reported two compliance findings in single-audit testing: one Medicaid-cluster finding related to eligibility and one finding tied to reporting for a regional economic reserve grant; no findings were reported for the other four major programs tested. The auditor directed commissioners to the compliance section of the audit report for details.

The board did not take formal action on the audit itself but asked for copies of the report and received staff assurances that the required LGC response and other follow-up documentation will be prepared and signed by the board, county manager and finance director within the statutory timeframe.

The county manager and finance director told the board they will provide further documentation explaining the negative indicators and any corrective actions tied to transfers or project timing.