Wellington auditors find no material weaknesses; officials expect finished 2024 financial statements at next meeting
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Summary
External auditors reported no significant deficiencies or material weaknesses for Wellington’s 2024 financial statements and federal-award compliance; the finance director said revenue trends are positive and the auditor will reclassify certain deferred revenues before issuing the final statements.
Jim Hinkle, an auditor with Hinkle and Company, told the Wellington Town Board of Trustees on Jan. 13 that the audit of the town’s 2024 financial statements is nearly complete and that auditors found no significant deficiencies or material weaknesses in the town’s internal controls.
Hinkle said the town also underwent a single audit for federal award expenditures (the town spent more than $1,000,000 in federal awards), and auditors found no instances of noncompliance for the major federal program reviewed. He described a technical presentation change the auditors will make: amounts historically reported as deferred revenue liabilities — primarily developer impact and tap fees — should be presented as restricted fund balance because those cash receipts are restricted for specific future purposes. Hinkle said auditors will make that adjustment and deliver a draft of the financial statements at the next meeting, and he expects the town will be able to file with the State of Colorado by the July 31 deadline.
"We did not find any significant deficiencies or material weaknesses in internal controls," Hinkle said. He added that the single audit opinion for federal awards will also be unmodified.
Town Finance Director and Treasurer Nick Redavid summarized the finance department’s work since the audit delays of prior years, credited recent staffing and process improvements, and reviewed third-quarter 2025 budget-to-actuals. He said the town’s reported consolidated general-fund revenue was about $7.9 million through the first 75% of the year, of which roughly $2.4 million represented payments owed from previous years. Property-tax revenue for 2025 was budgeted at $2.1 million and had exceeded budget by about $63,000 (nearly 3%) through September. Sales tax growth year to date was reported at 8.7%.
Redavid flagged several timing and budget items: a remaining final payment of $534,000 for the Larimer County Sheriff’s Office contract, a large annual payment to the North Poudre Irrigation Company budgeted at $2.9 million for 2025 (about $1,060,000 was paid in November), and ongoing underperformance of tap fees and developer contributions due to a slowdown in development. He said investment earnings were strong, averaging about 152% of budgeted expectations, and operating expenditures remained generally under budget across departments.
Trustees asked whether reclassifying deferred revenue preserves legal protections for restricted monies; Hinkle responded that restricted fund balances remain subject to the externally imposed restrictions that create them and distinguished those from town-designated committed or assigned funds that could be reallocated by the town.
Votes at a glance: the consent agenda — which included approval of the Dec. 9, 2025 meeting minutes; Resolution No. 01-2026 designating a public place for posting notices; and Resolution No. 02-2026 approving a three‑mile plan for municipal annexations — was moved, seconded and approved by roll call.
The board asked staff to return a draft set of audited financial statements and management’s discussion and analysis at the next regular meeting so trustees can consider formal acceptance and filing.
