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Dripping Springs accepts FY 2025–26 audit; auditors note unmodified opinion but repeat material weakness
Summary
The council accepted the FY 2025–26 audit, which carried an unmodified (clean) opinion and reported a combined net position of about $141.8 million. Auditors cited a repeated material weakness in year‑end closing procedures related to post‑close journal entries; staff described controls and planned fixes including dual signatories and restructuring budget line presentation.
The Dripping Springs City Council voted to accept the FY 2025–26 audit report after a presentation from the city’s auditors. The audit firm reported an unmodified (clean) opinion on the city’s financial statements and highlighted several key figures: a combined net position of about $141.8 million as of Sept. 30, 2025, an increase of roughly $35.9 million from the prior year, and a general fund balance of about $6.5 million (a $1.3 million decrease).
An auditor said, “We’re happy to report that our audit opinion is what’s called unmodified,” and described the audit components, including the management’s discussion and analysis, fund financial statements and required supplementary information. The auditor also noted a repeated material weakness tied to year‑end closing procedures and several post‑close journal entries identified during the audit. The material weakness was a repeat finding from the prior year, auditors said, and relates to timing and corrections made after fiscal year close.
City staff described steps already taken to strengthen controls: implementing a dual‑signatory requirement on journal entries, planning to split out salary and departmental line items in the financial software to increase transparency, and working to make more adjustments before the fiscal year closes so fewer corrections are required afterward. The finance staff explained that many journal entries were cleanup items — for example, invoices received after the close that needed reclassification into the proper fiscal year.
Council members asked several clarifying questions about the volume and timing of journal entries and whether additional oversight (such as an elected official’s sign‑off) would be appropriate. Staff said they will continue improving timing and internal review processes.
A motion to accept the audit was made and seconded; the council approved the audit by voice vote. The auditors provided contact information (engagement partner Janet Pittman) for follow‑up questions and said they are available to discuss details with council or staff.
What happens next: staff will pursue the corrective steps discussed, and the audit will be filed as accepted in the council record. The council did not direct immediate policy changes beyond the controls staff described during the presentation.
