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Llano audit: independent auditors issue clean opinion; city posts healthy reserves
Summary
An independent audit for the fiscal year ending Sept. 30, 2025, delivered an unmodified opinion and shows Llano’s general fund reserves at roughly 57% of annual expenditures; auditor said he will follow up on a $300,000 revenue variance question.
John Watson, an auditor with Brooks Watson & Company, presented the city’s annual financial audit for the year ended Sept. 30, 2025, reporting an unmodified (clean) opinion and a number of positive benchmarks. Watson said total assets exceeded total liabilities by $35,420,000 and the city’s governmental funds reported a combined ending fund balance of $4,252,403, an increase of $575,486 from the prior year. He said the city’s unassigned general-fund balance was $3,307,568 — roughly 57% of annual general-fund expenditures — providing more than six months of reserves.
During a question-and-answer period, Council member Finley asked why the audit slides showed a roughly $300,000 decline in total governmental revenues despite increases in most revenue components. Watson acknowledged the discrepancy, said he did not have the specific slide detail at hand, and committed to follow up with finance staff (Kara) after the meeting to explain the variance.
Watson walked council through the audit process, explained that the unmodified opinion means the financial statements were presented in accordance with generally accepted accounting principles, and highlighted the utility fund’s operating income and pension funded status. He noted the utility system produced operating income and that the city’s TMRS pension funded ratio was approximately 90%.
No formal council action was taken on the audit during the meeting; members thanked Watson and finance staff for the work and asked for the follow-up revenue explanation.
