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Auditor: Franklin Springs posts strong reserves but flag staffing risks and two control deficiencies
Summary
An auditor told the Franklin Springs City Council the city received a clean 2024 audit opinion, reported $651,000 in unrestricted general‑fund reserves (about 9.8 months of operations) and noted two significant internal‑control deficiencies tied to limited staff segregation of duties.
The city’s 2024 audit shows Franklin Springs finished the year with a clean opinion and a sizeable unrestricted general‑fund balance, but the auditor warned of internal‑control weaknesses tied to a small staff. "You could have gone another 9.8 months of operations" without additional revenue, the presenter said, pointing to a $651,000 unrestricted fund balance.
The presenter summarized three audit documents distributed to the council: an audit‑committee letter that would report any significant audit findings or disagreements; a management‑points letter outlining internal‑control recommendations; and the financial statements and disclosures. He said the audit opinion indicates the statements "present fairly" and that the city should take ultimate responsibility for the financials.
Why it matters: The council heard that revenue grew by about $48,000 (roughly 6%) in the general fund while expenditures rose as well; the presenter noted a $113,000 capital purchase in 2024 and that expenditures increased in part because of necessary spending. The auditor said the mix of revenues is heavily tax‑based (about 82% of reported receipts) and that inflation or sales‑tax growth can mask tax rollback effects.
The auditor also reviewed the water and sewer enterprise funds, saying revenues rose by roughly $39,000 (about 11%) and expenses rose about $24,000; the enterprise funds’ reserves were described as covering about six months of operations. He explained that reported operating shortfalls often include noncash depreciation and that budgeting for depreciation helps plan for future capital replacement.
On internal controls the presenter said the auditors identified two significant deficiencies related to staff wearing many hats and limited segregation of duties, a common risk in small local governments. He recommended additional training and noted that while staff perform well, some processes depend on auditor support to produce the annual financial statements.
The presenter also referenced upcoming accounting pronouncements (transcribed in the record as variants of "Gatsby/Gazby/Gabby" numbers) and said the auditors are monitoring and implementing changes as required.
The council followed the presentation with brief questions and a comment from a council member who noted repeated tax rollbacks; the presenter and others said maintaining the reserve level was prudent. The auditor closed by inviting council and staff to contact his firm with follow‑up questions.
The council did not take formal action on the audit other than receipt and discussion; the auditor confirmed he would remain available to the city for additional clarification.
