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Cape Canaveral accepts clean audit but auditors warn unassigned reserves are depleted
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Summary
Council accepted an unmodified audit opinion from James Moore LLP but auditors flagged a repeat finding: the city's unassigned general‑fund balance was fully depleted (0), triggering concerns about long‑term fiscal resiliency and potential JLAC scrutiny if unresolved.
The City of Cape Canaveral unanimously accepted its annual audit after auditors from James Moore LLP issued an unmodified opinion while warning the city's unassigned general‑fund balance is fully depleted.
Michael Masano, a CPA with James Moore, told the council the firm issued "an unmodified opinion" on the city's ACFR and that the city received the GFOA Certificate of Achievement for its financial reporting. He also said the audit included two recommendations: the city's "unfavorable financial condition" finding and one related to audit adjusting journal entries. "We did issue an unmodified opinion," Masano said, noting that the unassigned fund balance was "fully depleted" in fiscal year 2025 and that, because this was a repeat finding, the Joint Legislative Audit Committee (JLAC) could request a response if the condition continues.
Masano also summarized long‑term fund balances: the city's total fund balance has trended negatively since 2022 and the unassigned fund balance was 0 in fiscal year 2025, while assigned and committed amounts remain. He said the city's assigned/unassigned reserve proportion met a GFOA minimum calculation (20.9 percent in the presentation), but cautioned that the lack of unassigned reserves reduces flexibility to respond to unforeseen events.
Mayor Wes Morrison and councilmembers thanked James Moore and city staff for producing the audited financial statements. Councilmember Willis moved to accept and approve the audit; Councilmember Shoriak seconded. The roll call vote was unanimous, 5–0.
The audit and the council vote do not create a budget action; they record the auditors' findings and the council's receipt of the report. Staff and council said they will consider the auditors' recommendations as they prepare budget and capital‑improvement discussions this spring.
What comes next: staff noted that if the JLAC requires a response after another repeat finding, the city would need to provide a plan explaining how it will restore reserves or otherwise address the condition.
