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Southport posts clean 2025 audit; fund balances and cash reserves rise
Summary
Auditor Jay Sharp told the Board of Aldermen the 2025 audit received an unmodified (clean) opinion with no findings; the city’s general fund balance rose to more than $14 million and cash reserves are well above typical recommendations.
Jay Sharp, director of audit services for Sharp Patel, presented the City of Southport’s 2025 audit to the Board of Aldermen on Jan. 8 and reported a clean (unmodified) opinion and no audit findings for the year.
Sharp said the city met the Local Government Commission deadline for submission for the first time in several years. He noted fewer audit adjustments compared with prior years. The general fund ending fund balance grew to more than $14 million at year-end 2025, with roughly $10.7 million classified as unassigned and available for city use. Sharp also reported the general fund had about 310 days of cash reserves and the electric fund about 230 days, both above standard recommendations of three to six months.
Board members asked whether the electric fund’s operating results included full staffing costs and whether the city should consider spending down excess reserves for local relief or capital projects. Sharp said the reserves are unusually high but appropriate given Southport’s coastal risks and that the budget process is the correct forum to consider policy choices about reserves.
Board members flagged that some revenue growth was one‑time: the sale of a 400‑acre parcel contributed about $600,000 to 2025 revenue growth; Sharp warned that such proceeds should not be treated as ongoing operating revenue.
What happens next: The LGC review was expected within a week of the presentation; staff and aldermen will consider budget priorities in light of the audit findings.
