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Alamance County audit finds ‘clean’ opinion as reserves dip below county target
Summary
Martin Stearns and Associates presented Alamance County’s FY2025 audited financial statements, issuing an unmodified (clean) opinion while staff noted the unassigned fund balance fell below the county’s 20% policy, prompting discussion about bond ratings and recent transfers.
An outside auditor told the Alamance County Board of Commissioners that the county’s fiscal 2025 financial statements received an unmodified opinion, but commissioners and staff were urged to track a downward trend in the county’s reserves.
On behalf of Martin Stearns and Associates, an auditor reported the county’s general fund revenues were $223.9 million for the year — an increase of about 7% — and expenditures were $216.9 million, about 5% higher than the prior year. Total general fund balance was $96.3 million, with an available fund balance of $78.1 million. Unassigned fund balance was reported at $35.6 million, equal to 16.45% of general fund expenditures, below the county’s self-imposed 20% policy.
"We received an unmodified opinion. This is a clean audit opinion," the auditor said, noting the county met reporting requirements while identifying two material weaknesses in foster care/adoption and Medicaid programs listed in the compliance report.
Commissioners pressed staff on what the reserve percentages mean for borrowing costs. County finance staff explained that the 20% figure is a board policy (not a state mandate) intended to provide several months of operating coverage; while state rules do not require a 20% balance, supervisors warned that a negative trend below the board target could concern rating agencies.
Commissioner Powell and others asked about a recent $10 million transfer related to capital projects and a $10 million ARPA revenue replacement set aside for a courthouse expansion. Finance staff agreed to follow up with detailed transfer schedules and category-level numbers.
The auditor also highlighted top revenue and spending drivers: property tax revenue (about 55% of general fund revenue, property taxes reported at $122.8 million), local option sales taxes (roughly 20%), and restricted intergovernmental revenue (about 12%). Major expenditure categories included education (about 30% of general fund spending), public safety (about 25%), and human services (about 19%).
The presentation concluded with commissioners asking staff to provide additional detail on transfers and public safety expenditure increases so they can plan for the upcoming budget cycle.
The board did not take formal action on the audit itself but requested staff follow-up; a copy of the audit will be provided to commissioners the next morning, staff said.
