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External auditor issues clean opinion but flags repeat internal‑control finding for Atlantic Beach
Summary
Kevin Smith of Fergus Gray told the Atlantic Beach City Commission the FY2024 financial statements received an unmodified ("clean") opinion; the audit identified a repeat internal‑control finding on financial closing and some material adjustments, and staff outlined steps to fix the items.
Kevin Smith, audit director with external firm Fergus Gray, told the Atlantic Beach City Commission on Oct. 27 that the city’s fiscal‑year 2024 financial statements received an unmodified ("clean") opinion but that the audit identified one repeat internal‑control finding related to financial closing and reporting.
"We've issued what is it, unmodified opinion, clean opinion, that's what you want," Smith said during his presentation. He described finding 2024‑01 as a repeat item that led to material adjustments and delayed portions of the audit. Specific issues included accounts‑payable and expenditure postings in the wrong period, a beginning balance that was not reversed, and a $1,000,000 land purchase that had not been recorded in the general fixed‑assets account group; management’s written responses appear in the back of the audit report.
Smith also reported that the city had no compliance issues with the federal ARPA (CSLFRF) program and that the city complied with Florida statute requirements on investment of public funds. He noted two recommendations in the management letter: an internal accounting entry showing a temporary $1,000,000 loan from the general fund to the pension fund that should be remediated, and a sanitation fund that, despite a recent rate increase, still shows a negative net position.
On high‑level results, Smith said total revenues were roughly flat year over year, investment returns offset declines in permit and non‑property tax revenue, and the general fund’s net change in fund balance was a negative about $225,000 for the year. He reported pension funded positions are strong: approximately 100% for the general plan and about 95% for the police plan, driven in part by strong investment returns in the audit year.
Mayor Ford and commissioners asked follow‑up questions about the reserve percentage, the timing of audit adjustments, and who manages the city’s investment and pension portfolios. Smith clarified that the pension plans are managed by their separate pension boards, which hire investment advisors, and that the city’s general fund investment earnings can vary with market conditions.
The commission asked staff to return with the corrective steps and timeline for addressing the repeat finding and the management‑letter recommendations. The audit report and management letter will be filed in the commission packet and serve as the basis for follow‑up by finance staff.
