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Blowing Rock council accepts draft 2024–25 audit after restatement and one formal finding
Summary
Council accepted a draft audit noting a prior‑period restatement for compensated absences, one finding on fixed‑asset accounting (Finding 20251) and flagged internal control and budget presentation issues; auditors said the town must respond to the Local Government Commission within 60 days.
The Blowing Rock Town Council voted March 10 to accept a draft 2024–25 audit presented by Hannah L. Lasco of Thompson Price, Scott Adams & Company.
Lasco told the council the audit includes a prior‑period restatement tied to a change in accounting for compensated absences and identified two commonly presumed significant risks in any audit: management override of controls and improper revenue recognition. "All material misstatements have been corrected that we are aware of," Lasco said during the presentation.
The audit lists a single formal finding, Finding 20251, related to fixed‑asset accounts and prior‑period adjustments. Lasco also flagged financial performance indicators of concern in the water and sewer fund, where operating expenses exceeded operating revenues, and noted ordinance‑level budget presentation issues in capital project funds where completed projects still show expenditures.
Key figures presented by the auditor included a general fund total fund balance of $8.9 million, an unassigned fund balance of $6.1 million (about 40% of general fund expenditures), general fund expenditures of $15.1 million, a property tax rate of $0.40 per $100 valuation and collection rates near 99.56%. The auditor reported total property valuation of about $1.89 billion and debt of roughly $9.2 million for governmental activities and $4 million for business‑type activities.
Lasco advised the council to ensure fees are charged in accordance with budgeted rates and to close out completed capital project lines so the capital project funds accurately reflect active projects. She reminded members that the town must submit a response within 60 days regarding the LGC finding and expects capital project clean‑ups to be completed before the fiscal year end, June 30, 2026.
Council members asked whether the auditor had observed any red flags beyond the items noted; Lasco said she had not seen specific new red flags but emphasized the inherent nature of revenue‑recognition risk and the importance of internal controls.
A council member moved to approve the draft audit; the motion was seconded and the council approved it. Lasco said the final report will be distributed when completed.
