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Town auditor gives Woodfin a clean opinion, warns FEMA reimbursements still pending
Summary
Auditor Nancy Lux presented the draft fiscal 2025 audit, reporting an unmodified opinion and highlighting disaster-related entries tied to Hurricane Helene; she said $1,040,642 in FEMA funds has been obligated but other reimbursements and state loan rounds remain in process.
Nancy Lux, the CPA who audits Woodfin’s books, told the Town Council on Dec. 9 that her firm issued an unmodified (clean) audit opinion for the fiscal year ending June 30, 2025. “We issued an unmodified audit opinion, which is the highest opinion that we can issue,” Lux said during a presentation of the town’s draft report.
Lux walked council through the management’s discussion and analysis, highlighting that property taxes remain the town’s largest revenue source at just over 48 percent and that disaster-related work from Hurricane Helene substantially affected this year’s results. She said the audit shows about $3.2 million in extraordinary expenditures for cleanup and that the town had $1,040,642 in FEMA obligations recorded on the schedules subject to single-audit requirements. Lux said other FEMA requests totaling “a little over $3,000,000” were not recognized as revenue because they were not yet obligated as of the audit date.
The auditor explained the conservative accounting treatment: unobligated FEMA receivables were disclosed as deferred inflows until obligation is confirmed by FEMA. Lux also described a dual-dating approach the firm will use once the Office of Management and Budget (OMB) finalizes compliance supplements for 2025. The supplements affect federal single-audit reporting; Lux said auditors across the country are waiting for the OMB guidance but that she did not expect material numerical changes to the figures she used.
On compliance, Lux reported no findings in the Yellow Book review, the federal single audit, or the state single audit. She said the CFDA program audited was Department of Homeland Security disaster grant public assistance for presidentially declared disasters and that state cash-flow loans for disaster were included on the state schedule. Lux encouraged council members to read the MD&A section for narrative context and said the footnotes (including a FEMA receivables footnote and an extraordinary items note) explain the town’s treatment in more detail.
Sherry Powers, who introduced the auditor, and finance staff were thanked for preparing the audit workpapers. Lux also noted a new accounting standard implementation—GASB 101 on compensated absences—that added about $43,000 to the town’s accrued liability, an amount she said was not material to the town’s overall financial position.
Next steps: Lux said the final federal single-audit components are contingent on OMB action; when the compliance supplements are finalized she will issue the final federal single audit sections and provide council with final copies of the report.
