Auditor issues unmodified opinion; FEMA disaster costs and loans dominate 2025 report

Woodfin Town’s independent auditor said the town’s financial statements earned an unmodified opinion and highlighted substantial disaster-related spending this year tied to Hurricane Helene.

Nancy Lux, the CPA who led the audit, told the council the audit was issued in draft Nov. 1 and that she does not expect numeric changes when the Office of Management and Budget finalizes 2025 compliance supplements for federal single-audit reporting. “We issued an unmodified audit opinion, which is the highest opinion that we can issue,” Lux said.

The auditor said property taxes remain Woodfin’s largest revenue source—more than 48 percent—followed by sales taxes. The audit called out extraordinary items related to disaster response: the cleanup expense alone was about $3,197,000, Lux said, and FEMA had obligated roughly $1,040,642 in federal funds that were subject to single-audit reporting. Lux noted the town had unreimbursed FEMA requests totaling “a little over $3,000,000” that the audit did not recognize as revenue until FEMA formally obligates them.

Lux described the accounting approach: unobligated FEMA receivables are shown as deferred inflows until obligation or reimbursement is confirmed, a conservative treatment that will reverse as funds are collected. She also noted the town received state disaster cashflow loans and that the budgetary presentation treats those loans differently on cash-basis statements than in the full-accrual statements.

The report contains no compliance findings in the Yellow Book review, the federal single audit or the state single audit, Lux said. She pointed council members to the MD&A and the footnotes—particularly the footnote on FEMA receivables and the extraordinary item footnote on page 34 and later pages—for more detail.

Lux also flagged a new accounting change implemented by the town under recent GASB guidance related to compensated absences; the adjustment added roughly $43,000 to accrual liabilities but was not material to the town’s overall position.

The audit materials, Lux said, include budgetary schedules and detailed collection statistics—Woodfin’s combined property and motor vehicle collection rate was reported at 99.59 percent—and supplemental schedules showing capital outlays, including about $2.5 million for the Riverside Park whitewater wave project.

The council asked a few clarifying questions about FEMA obligations and the timing of future single-audit requirements if FEMA obligates more federal funds in the coming fiscal year. Lux said she expects to dual-date the federal single-audit report when the OMB compliance supplements are finalized but does not anticipate changes to the reported numbers.