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Town accepts FY25 audit with clean opinions, auditor flags small compensated-absence adjustment
Summary
The Southern Pines Town Council accepted the FY25 audit presented by Malden and Jenkins, which issued unmodified opinions on financial statements and grant testing. Auditors noted one immaterial $65,000 understatement in compensated-absence liability and offered management recommendations; council adopted the audit by motion.
Leanne Bogasala, an audit partner at Malden and Jenkins, presented the town's FY25 audit during the Jan. 20 work session and told the council the firm issued unmodified (clean) opinions on the basic financial statements, the government-auditing "Yellow Book" opinion and required single-audit opinions for federal and state grant programs tested, including ARPA and the Clean Water State Revolving Fund. Bogasala said the firm found no material weaknesses or significant deficiencies.
The audit included one immaterial audit adjustment: auditors determined the town's recorded liability for compensated absences (accrued vacation and related payroll taxes) understated payroll-related benefits by about $65,000. Bogasala said the amount was not material to users of the financial statements and that staff intends to add the related benefit accrual prospectively in the 2026 financial statements. The auditors also provided a management letter with nonbinding suggestions to improve internal controls and noted two pending GASB pronouncements that will be implemented in future audits.
Council members asked clarifying questions about the compensated-absence item and the auditors' approach to grant selection; Bogasala described a risk-based rotation for testing federal and state programs. Mayor and council moved to adopt the audit report by voice vote. Staff will post the final financial statements and the auditor's reports as appropriate.
