Auditors give Richmond a clean opinion; town ends year with $1.2M carryforward

Heather Hunter, audit director for RHR Smith, told the Richmond Select Board that the auditors issued an unmodified ("clean") opinion on the town's financial statements for the fiscal year ended June 30, 2024. "We were hired to perform the audit and to render the opinion on the town's financial statements as of June 30th, 2024," Hunter said, adding, "that was an unmodified opinion ... sometimes referred to as a clean opinion."

The auditor said the town's municipal entity shows roughly $24.1 million in total assets and resources and a net position that rose modestly in the year. Hunter highlighted that the general fund grew by about $300,000 and that the unassigned portion increased by roughly $253,000 to approximately $1.76 million, giving the town about 15.3% of annual expenditure coverage — just under two months of operating expenses. "That gives you a lot of flexibility to decide if you want to carry forward that amount to reduce taxes," she said.

The water and sewer (proprietary) funds were mixed: the water fund had a small surplus and an unrestricted balance that covers roughly half of operating expenses, while the sewer fund posted a deficit that drew down its net position. Hunter cautioned the board that sewer operating income will require attention in budgeting.

In addition to the opinion, auditors issued a management letter with two operational recommendations. The first addressed outstanding checks older than six months: staff reported most were uncashed fire department paychecks or tax/insurance refunds and are being reissued or sent to the state unclaimed property division. The second advised reconciling and validating the capital-asset database; auditors found some asset valuations and depreciation calculations needed correction and noted that the municipality rebuilt software to fix depreciation. "Some of the asset valuations were not accurate and therefore it just needs to have that kind of review process," Hunter said.

Board members and staff discussed flood-related costs from July (about $2 million of damage) and the timing of FEMA reimbursements, and staff noted the highway fund balance has been reduced substantially as flood reimbursements await state and federal processing. Select Board members thanked the auditors and finance staff for the clean report and asked staff to bring recommended operational changes back for implementation.

Next steps: auditors are available for follow-up questions and staff will incorporate the management recommendations in routine finance procedures and the upcoming budget work this spring.