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Reidsville receives clean audit; water‑sewer fund shortfall flagged, city says it has remedied covenant issue
Summary
Auditors issued an unmodified (clean) opinion on Reidsville’s June 30, 2024 financial statements but noted the water/sewer fund’s operating net income was negative and that a debt‑covenant ratio was not met; the city said it has implemented a rate study and rate increases to remedy the covenant.
An outside auditor told the Reidsville City Council on Jan. 14 that the city’s financial statements for the year ended June 30, 2024 received an unmodified (clean) opinion, and the audit identified no material weaknesses or audit adjustments.
The audit engagement director said the firm examined federal and state grants, including the Coronavirus State and Local Fiscal Recovery Funds and the Clean Water State Revolving Fund, and found no reportable compliance issues. The presenter said, “we issued an unmodified opinion in all cases,” indicating the auditor’s highest level of assurance under applicable auditing standards.
The auditor also said two items require filing with the Local Government Commission: the water/sewer fund’s operating net income (excluding depreciation but including principal and interest) was less than zero for the year, and the city did not meet a debt‑covenant ratio. The presenter told council that the city has already completed a rate study and implemented new water/sewer rates intended to remedy the covenant deficiency; the auditor said the city will need to document that action in a formal letter to the Local Government Commission within the stated filing window.
Auditors reported no material weaknesses, no significant audit adjustments, and no indications of fraud or illegal acts during the audit period. The engagement director said the firm encountered no difficulties and found no independence issues.
Council members asked for a plain‑language summary of the city’s financial position; the presenter said the overall financial state is good, with the water/sewer fund the primary area of focus and with corrective steps already taken.
