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Independent auditor gives town a clean opinion but flags lower reserves and water-fund loss
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Summary
The town’s FY2025 audit received an unmodified (clean) opinion and a clean single-audit on federal and state grants, including FEMA expenditures; auditors reported the town’s available general-fund balance fell to about 20% (below the Local Government Commission 25% guideline) and the water fund showed a roughly $190,000 loss under operating measures tied to storm impacts and purchased water.
The Town of Black Mountain received an unmodified (clean) audit opinion for fiscal year ending June 30, 2025, and a clean single-audit on the town’s federal and state grant expenditures, the council heard April 13.
Travis Keever of Cool Killian CPAs (speaker 7) told the council the audit found no material weaknesses in internal control and no reportable noncompliance with laws and regulations affecting financial reporting. He said the auditors issued an unmodified opinion on the financial statements and an unmodified compliance opinion on the single‑audit for federally and state‑funded programs related to hurricane recovery.
Keever said the audit reviewed roughly $968,000 in FEMA expenditures and noted a state cash‑flow loan of about $705,000, both of which were subject to continuing compliance requirements. The audit also highlighted four Financial Performance Indicators of Concern required by the Local Government Commission; chief among them, available general-fund balance as a percentage of expenditures fell to about 20% in FY25, below the 25% recommended threshold.
On enterprise funds, Keever said the water and sewer fund showed a roughly $190,000 loss when measured as operating cash flow (net income plus depreciation minus debt principal), a result Keever attributed primarily to the effects of Hurricane Helene, including purchasing water from another municipality while the town’s system was offline and repair expenditures.
Why it matters: The clean opinions indicate the town’s financial statements and grant compliance met auditing standards, but the decline in available reserves and the water fund’s negative operating result signal fiscal stress tied to storm recovery and increased operating costs. Council members said they will use the audit during upcoming budget discussions to prioritize spending and protect public-safety and other high-priority operations.
What’s next: Staff and the council will use the audit’s data during budget preparation and monitor the LGC indicators, Keever said; he also recommended staff follow up on water‑purchase budgeting and the timing of debt and reimbursements tied to recovery efforts.
