Finance staff walk council through draft 2025 ACFR; town reports $106M fund balance and $1.9B net position amid ongoing audits

Kimberly Branch, finance staff for the Town of Cary, led council members through the draft 2025 Annual Comprehensive Financial Report (ACFR) at the Feb. 5 work session and explained how to read the 300-page document, why it matters and the schedule for finalizing it.

Branch said the ACFR is the town’s official annual financial report, prepared under generally accepted accounting principles and reviewed by independent auditors. She outlined the review timeline (books close June 30; staff draft by Oct. 31; auditors’ fieldwork in the fall) and said the town will submit the final report to the Local Government Commission by Feb. 12 once the compliance section and auditor opinion are complete.

Branch highlighted headline numbers in the draft: a reported net position of about $1,900,000,000 and a general fund balance of roughly $106,000,000, which she said equates to about 41% of expenditures and exceeds the town’s policy floor of 33.33%. "This is our town’s official annual financial report," Branch said, adding that the management discussion and analysis (MD&A) and the detailed schedules explain how those totals change year to year.

Councilors asked for clarification on how the fund-balance percentage was calculated and whether the report identifies encumbrances or other committed amounts; Branch said those details are in the MD&A and notes and that staff will ensure the calculation and supporting schedules are easy to find in the final distribution.

Branch also reviewed other parts of the report councilors should watch closely: the debt schedules (pages cited in the draft), the financial notes that explain fund-balance restrictions, and the subsequent-events note that lists significant events that occur after the fiscal year end. She said the compliance section — where grant compliance, auditor findings, and material weaknesses are reported — remained in progress but would be included before the final submission.

Staff noted there are multiple, concurrent inquiries and reviews related to the town’s finances. At the work session staff reminded the council that the North Carolina Office of the State Auditor is conducting an investigation into alleged cases of fraud, waste and abuse; Bond Dickinson has been retained to examine p-card usage and reimbursements and other matters; and the district attorney has asked the State Bureau of Investigation (SBI) to conduct a criminal inquiry. Staff said Cherry Beckert (the town’s current contracted auditor) and Leanne Waters would present audit findings that evening at the full council meeting.

Branch said the draft ACFR will be posted online after the auditors issue their opinion and the town completes printing and distribution. Councilors asked about historical percentages and Branch said the town had been above the 33.33% policy floor in recent years, though the 2023 percentage was about 31%.

What’s next: staff will finalize the compliance section, coordinate with auditors for the opinion, post the final ACFR online after publication, and follow up with councilors on any targeted schedule or policy questions raised during the session.