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City audit returns clean opinion; auditors highlight increased available fund balance and grant-driven changes
Summary
Martin Starnes & Associates told the council it issued an unmodified (clean) opinion on Hickory's 2025 audit, noting increases in unassigned and available general fund balances, grant activity affecting restricted intergovernmental revenues, and healthy enterprise fund quick ratios; the final report and OMB compliance supplement are expected in January.
Martin Starnes & Associates presented Hickory’s annual audit at the Dec. 16 council meeting and issued an unmodified (clean) opinion, the auditing firm’s senior manager, Cassie Wilson, told council members.
Wilson said the city's unassigned general fund balance and available general fund balance increased for the year, and she described how the Local Government Commission (LGC) calculates "available" fund balance for comparability across units. She noted some large figures are earmarked for capital purchases and grant matches — for example, fire-truck acquisitions and airport grant matches — and cautioned that auditors and the LGC analyze fund balances differently.
Wilson summarized revenue and expenditure changes: transfer activity reduced revenue comparisons year-to-year; expenditures increased by approximately $7.2 million driven mainly by debt service, public safety capital outlay (about $2.6 million) and salaries and benefits (about $1.9 million). Restricted intergovernmental revenues rose due to federal and state grants.
On enterprise funds, Wilson said the water and sewer quick ratio remained above the LGC concern threshold (1.0), indicating adequate current assets relative to liabilities. She said the firm is finalizing the compliance supplement tied to OMB uniform guidance changes and expects to submit the final report to the LGC in January.
Council members asked follow-up questions about how the presented totals relate to the "available" versus "total" fund-balance figures on charts; Wilson and staff clarified the definitions and that the firm does not include certain capital-reserve amounts when calculating unassigned balances. No material exceptions were identified in the audit presentation.
Wilson: "We issued an unmodified opinion that is a clean report of the audit."
