Town auditor issues unmodified opinion, flags accrual recording adjustments

Emily Sobchak of Greenfinney Collie presented the town's fiscal 2025 financial statement audit and said the firm issued an unmodified opinion, providing reasonable assurance that the statements are materially correct. She told council the general fund increased by $2.6 million to $31.5 million and that the unassigned fund balance was $23.8 million, representing just under 50% of fiscal 2025 operating revenues.

Sobchak said the town's policy to hold at least 30% of operating revenues in unassigned fund balance is conservative and reflects cash-flow timing concerns, noting that property tax receipts come late in the calendar year. She also highlighted capital additions of $14.8 million (capital assets of $142.2 million as of June 30) and long-term debt of $46.6 million, with anticipated debt service for fiscal 2026 of about $3.6 million.

On internal controls, Sobchak reported one finding related to the recording of accruals at year end. She explained the town generally operates on a cash basis and that audit adjustments were needed to convert to modified accrual accounting for liabilities and receivables that relate to fiscal 2025 but settled after year end. She said this appeared to be a close-of-period process issue rather than a systemic day-to-day control failure.

On federal compliance, Sobchak said the single audit work covering coronavirus state and local fiscal recovery (ARPA) funds found no compliance findings for fiscal 2025. "A lot of people call them the ARPA funds," she said, and the firm found no single-audit issues.

Chair followed by thanking the auditor and staff; Sobchak said she would welcome questions and work with staff on any final items before issuing the final report.

The audit presentation closes with staff noting they will circulate the final audit after a few remaining reviews.