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Auditors deliver clean opinion on Fairhope's FY2025 financial statements
Summary
Auditors from Warren A reported an unmodified (clean) opinion for Fairhope's fiscal year ended Sept. 30, 2025, and summarized rising assets, capital spending and a 58% jump in federal grant revenue; auditors and council discussed single-audit compliance and no material weaknesses were identified.
Lee Parks of Warren A presented the independent auditor's report for the fiscal year ended Sept. 30, 2025, saying the city received an unmodified opinion dated March 13, 2026 — an auditor’s definition of a clean opinion. He told the Fairhope City work session on June 29 that government-wide totals show $389.0 million in assets and deferred outflows, $75.8 million in liabilities and a $313 million net position.
Parks said total cash was $82.1 million, receivables $13.5 million and capital assets $282 million, an increase of about $37.6 million driven by $48.4 million in current-year additions and $10.7 million in depreciation. He broke the additions down by fund: city capital additions $25.8 million, gas $2.1 million, electric $3.8 million and water and sewer $16.5 million.
"This is where it states that the city received an unmodified opinion, which is a clean opinion," Parks said. Rick, a second auditor from the firm, said the single-audit compliance opinion was also clean after testing major federal programs.
The auditors reported that accounts payable totaled $12.6 million (up about $2.4 million, driven by capital projects) and that long-term debt declined to $29.3 million. Pension and OPEB measures were presented as estimates derived from RSA allocations; Parks cautioned that pension allocations fluctuate year to year and are recorded as reported by the plan.
On the revenue side, Parks said property taxes were $11.3 million, sales tax $16.1 million (about $846,000 higher than the prior year) and intergovernmental revenue $16.3 million. The auditors said federal funds recognized for the year were $16 million — up about $5.9 million, or 58% — which drove much of the intergovernmental increase. Parks and Rick described the city as a low-risk auditee and noted the prior-year single-audit reporting finding (2024001) had been closed.
Council members asked for supplemental schedules and Lee Parks pointed them to the budget-to-actual schedule in the annual report for detailed line-item variance data. The auditors and council praised city finance staff for timely filings and controls; the auditors said they found no material weaknesses in internal control in their limited-scope audit procedures.
The city will publish the financial statements and single-audit package to the Federal Audit Clearinghouse as required. Council members asked follow-up budget and variance questions and the auditors said staff would supply the requested total revenue/expense comparison from the supplemental schedules.
Ending: The audit presentation closed with no outstanding material weaknesses and staff and council thanked the auditors and the finance team for the work.
