Auditor: North Augusta receives unmodified 2025 opinion; ARPA spending found compliant

Grant Davis of Malden & Jenkins told the North Augusta City Council study session on July 13 that auditors issued an unmodified opinion on the city's 2025 financial statements and found no material weaknesses in internal control.

"We've ultimately issued an unmodified opinion on the city's financial statements," Davis said, summarizing the annual comprehensive financial report and related compliance work. He said the auditors also issued a clean report on compliance for the single major federal program they tested: the coronavirus state and fiscal recovery funds program (CSFRF), commonly called ARPA, which accounted for about $5.8 million of the city's federal expenditures in 2025.

Why it matters: an unmodified opinion indicates auditors could not find misstatements that would require qualification of the city's basic financial statements. The clean single-audit finding means the auditors did not identify reportable noncompliance or control deficiencies tied to the ARPA funds they tested.

Davis walked council through headline numbers from the audited statements. Total assets were reported at roughly $320 million, liabilities near $120 million, and a city share of pension liability of about $25 million. Long-term bonds and notes were cited at approximately $83 million. On an all‑funds basis, total revenue was about $74 million against $59 million in total expenses, producing an increase in net position of about $15 million.

On the general fund specifically, Davis said the fund balance totaled about $3.7 million, with roughly $3.6 million unassigned and available for appropriation. He stressed that the audit incorporates professional judgments and disclosures that are audited alongside the numbers.

Council members pressed on recent years’ patterns of expenditures exceeding revenues in the general fund. Davis and City Administrator (speaker 2) explained that the presentation on the general fund excludes transfers and certain other financing sources and uses — items that can materially change the visual comparisons on a slide — and that hurricane Helene drove large cash outlays in recent years that will be mitigated as FEMA reimbursements are received.

"We were still paying out a large number of invoices ... associated with Helene," the administrator said, noting timing differences between expenditures and federal/state reimbursements.

Davis said auditors found no disagreements with management's accounting estimates and no instances of noncompliance that were material to the financial statements. He noted upcoming accounting-standard changes for which the city should be prepared and thanked city staff for cooperation during an early audit schedule that began in February.

The presentation and the full audit documents are posted on the city's website under the government tab, Financial Transparency -> Financial Reports. The council indicated it would review the audit and raise specific questions during the upcoming council meeting and budget-book review.

Ending: The auditor made hard copies available to council and said he would answer more detailed questions about specific funds on request; staff indicated the audit will inform budget preparation and longer-term capital decisions.