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Pinetop Lakeside council accepts annual audit despite state compliance notes; April revenues dip
Summary
The town council unanimously accepted the fiscal year 2025 annual comprehensive financial report (ACFR) after the auditor reported a clean (unmodified) opinion but flagged budget overruns in several departments; April 2026 month-to-date revenues show a drop driven largely by a $135,000 state tax correction tied to construction receipts.
The Pinetop Lakeside Town Council unanimously accepted the town's annual comprehensive financial report for the year ended June 30, 2025, after an auditor from Squire delivered a clean opinion but noted state compliance findings for several departments.
Crimson Singleton, the auditor who said she worked on the engagement, told the council the independent auditor's report was "an unmodified, or in other words a clean opinion on the financial statements." She explained a restatement tied to a new accounting standard for compensated absences and highlighted that townwide capital activity included about $6 million in additions and $6.1 million in construction-in-progress on the police building.
The audit also flagged several budget overruns under state law. The state compliance section notes that certain department expenditures exceeded approved budget amounts (the report lists specific overrun amounts for town council, town manager, finance and fleet maintenance and reports the recreation and tourism fund exceeded budget by $39,358). Singleton said those compliance matters are reported separately from the auditor's opinion on the financial statements.
Councilmember Heiser pressed the auditor on the practical meaning of a clean opinion when the compliance report showed statutory violations, saying, "I struggle to understand how accurate financial statements can be in violation of state law." Singleton replied that the unmodified opinion addresses whether the numbers in the financial statements are materially correct, while state compliance findings are a separate report focused on adherence to statute and internal controls.
On cash and fund balances, Singleton said governmentwide net position for governmental activities was about $8.5 million, with a noted decline in some available resources after transfers to capital projects. She pointed out that general fund unassigned balance at June 30 was about $602,000, a decrease of roughly $2.6 million year over year, and reminded council that the Government Finance Officers Association recommends a minimum of two months of operating reserves.
Council also received the town's April 2026 monthly financial report from Sarah in finance, who said year-to-date revenues totaled just over $6 million with transaction privilege tax (TPT) collections near $4.3 million. She told the council that overall TPT was down 3.4% year-to-date and that construction receipts appeared especially weak in April because the state corrected prior-year tax treatment and removed roughly $135,000 from the town's April numbers.
The council accepted the ACFR and the annual expenditure limitation report by voice vote; the auditor and staff said they will continue to work with council on controls and monthly monitoring to reduce future compliance risks.
The council did not direct immediate policy action beyond continued staff work to address the compliance recommendations and the recurring monthly financial monitoring that finance staff said they are building into reporting.
