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Town audit: independent auditors give Hilton Head clean opinion, note one reporting omission
Summary
Independent auditors issued an unmodified (clean) opinion on Hilton Head Island's FY24 financial statements, saying revenues exceeded expenses across funds and noting one reporting omission tied to an other-post-employment-benefits plan of roughly $3.7 million; council asked staff about safeguards to avoid similar oversights.
Auditors told Hilton Head Island Town Council on Jan. 14 that the town's FY24 financial statements present fairly and earned an unmodified, or "clean," opinion.
"We were able to issue the town a clean or what we call an unmodified opinion," audit partner Trey Scott told the council, adding that the auditors followed generally accepted auditing standards and government auditing standards in conducting their review.
The auditors said they found one compliance/reporting issue tied to an other-post-employment-benefits (OPEB) plan that had not previously been reported; the estimated liability shown this year was about $3.7 million. Scott emphasized that the finding did not affect fund-level results or the numbers the town has used for decisions.
John McGowan, the town's assistant finance director, and Scott reviewed a set of high-level metrics the firm uses to judge municipal financial health: the town's government-wide net position rose about $51 million in FY24, the general fund balance is roughly $40 million, and the town's unassigned (liquid) position covers about 3.3 months of expenditures (about 8.6 months when combined with committed and assigned balances).
Council members pressed auditors about internal controls and whether management should pursue targeted control audits. Scott replied the external audit is not an opinion on internal controls and that auditors would report material control weaknesses if they encounter them; he suggested targeted internal-control reviews are a good practice but are a separate engagement.
Councilmember Hunter asked how to prevent a repeat of the reporting omission. Scott said the plan "somehow just slid under the radar" and was likely missed because it should have been identified under prior-year procedures. He urged careful year-over-year review and noted the town's finance team responded promptly during the audit.
Mayor closed the discussion by thanking the finance department and auditors for the work. The report and the auditors' communication will be part of the town's annual comprehensive financial report submitted for review by the Government Finance Officers Association.
