Stanley audit issues unmodified opinion but flags continuing internal-control weakness

Michael Carey, senior audit manager at RHCPS, presented the Town of Stanley’s fiscal year 2023–24 audit results at the Aug. 12 council meeting, reporting an unmodified opinion for the major funds and noting work remaining only for submission to the Local Government Commission (LGC).

Carey said the audit found one continuing material weakness related to the town’s financial reporting software, specifically customer receivables and deposit liability subledger reports, a finding that carried forward from the prior year. The audit report also disclosed compliance matters in footnotes, including a late audit submission and several budgetary noncompliance items; Carey said management had taken steps to address new fidelity-bonding requirements for 2024.

Financial highlights presented by Carey included general-fund revenues of $5,345,000 and expenditures of $5,479,000 for 2024, a general-fund balance of about $2.7 million (roughly seven months of unrestricted cash), and a water/sewer fund with 2024 revenue of $4,118,000 and expenditures of about $3.7 million. Carey noted that the town’s available fund-balance percentage (37.05%) remains below the 60% average for similar-sized communities and recommended incremental improvements.

Town Manager Heath Jenkins provided context, saying comparisons can be skewed by tourism-driven revenues in some communities; Carey said audit deadlines in North Carolina have changed, making audits due by Dec. 31 following the fiscal year end and that fieldwork for the 2025 audit was tentatively scheduled for September.

The audit report was issued Aug. 6, 2025, and staff indicated it will be submitted to the LGC as required.