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Hope Mills receives clean FY2025 audit despite falling fund balance
Summary
Auditors issued an unmodified (clean) opinion on the Town of Hope Mills’ FY2025 financial statements, but report the town’s unassigned fund balance and certain financial ratios declined; public safety accounted for nearly half of total expenditures in 2025.
The Town of Hope Mills received an unmodified — or clean — audit opinion for the fiscal year ending June 30, 2025, auditors told the Board of Commissioners on Feb. 16.
Jay Sharp, audit partner with Sharp & Patel, reported the audit was completed on schedule and submitted to the Local Government Commission (LGC). Sharp said revenues totaled about $19.5 million for 2025 while expenditures were roughly $22.9 million, driving a decrease in the town’s fund balance to about $8.1 million from $9.5 million the prior year.
The most immediately notable audit metrics were the town’s unassigned fund balance and cash reserves. Sharp said the town’s unassigned fund balance available for use was approximately $4.3 million, representing about 19% of total expenditures — below the LGC’s 25% guideline. Unrestricted cash reserves equated to about 91 days of expenditures, a range the auditors described as within a typical three-to-six-month target.
Sharp highlighted the composition of revenue and spending. Property taxes made up about 36% of revenue and restricted governmental revenue about 34%. On the expenditure side, public safety comprised 49% of total spending in 2025, an increase driven primarily by salaries, benefits and capital outlays.
The audit found no reportable findings for FY2025, and the auditing team reported no disagreements with management or difficulties during fieldwork. Sharp described the town’s key internal-control testing areas as cash disbursements, payroll and procurement card (p-card) usage.
Mayor Jesse Belfflowers and board members discussed action items raised by the audit: reviewing internal controls and policies, examining the management discussion and analysis and statistical tables in the audit report, and preparing for the March 6 budget retreat where the board will address revenue and expenditure trends. The board was urged to consider the fund balance percentage in coming budget decisions.
The audit partner said some LGC financial-performance indicators were below preferred thresholds for 2025 and noted the town used prior-year fund balances for current operations. Town staff and the audit partner recommended board review of the audit packet and follow-up at the budget retreat. Copies of the full audit report were made available to commissioners.
