Cary Council reviews auditor finalists and Q3 financial snapshot; staff debate extra oversight

Cary Town’s finance director gave a Q3 financial briefing and staff outlined two finalists for the town’s next external audit contract, prompting council questions about auditor independence and whether the town should add internal oversight.

Financial snapshot: Finance Director Kimberly Branch said revenues and the utility fund were outperforming expenditures as of the March 31 quarter, and that the town was projecting a roughly $19 million favorable variance at year-end that would keep fund balance above policy. Branch noted a one-time PAS settlement of roughly $5 million that increased utility revenues through March.

Auditor RFP results and fees: Branch said four proposals were received and two finalists (Cherry Bekaert and Malden & Jenkins) were interviewed. She reported baseline audit fees of approximately $92,500 for Cherry Bekaert and roughly $100,000 for Malden & Jenkins and noted both firms could offer additional advisory services for an extra fee.

Council concerns: Several members pressed on the role of auditors for surfacing emerging fiscal risks and on prior history with underfunded reserves, asking whether extra or different audit services should be added to ensure policy compliance. Staff pointed out that an audit opinion focuses on material misstatements under GAAP, not on every policy or management decision, and suggested combining external audit work with a restored internal-audit role to increase ongoing oversight.

Next steps: Council asked staff for cost estimates of optional expanded audit services and for recommendations about re-establishing an internal-audit function; staff described three options for contract length and approach and noted contract approval is scheduled for the June 11 council meeting.