Auditors issue unmodified opinion on FY2025 but flag repeated control weaknesses

Catherine Patnaught, partner in charge of the audit for O'Connor Davies, told the Towne Bridal Board of Finance that the auditors issued an unmodified opinion on the town’s fiscal‑year‑ended 06/30/2025 financial statements.

Patnaught said the management’s discussion and analysis provides a concise executive summary and highlighted several reporting changes and results: implementation of GASB guidance on compensated absences increased the town’s liability for accrued sick and vacation pay and reduced net position by $2,900,000, and a new custodial fund was established to record rural food city tax collections and a roughly $512,000 distribution to the borough.

The audit noted nearly $7.3 million of capital additions in the year — primarily for sewer and water infrastructure, school HVAC and field work, and road paving — while general obligation bonds declined by about $1.9 million. On a GAAP basis the general fund balance rose by $736,000 to a $9.6 million total, with an unassigned fund balance of approximately $9.0 million (about 21.7% of general fund expenditures), Patnaught said.

The auditors also tested federal and state grant activity. "We had no findings or questioned costs" in the federal single audit tests (community development block grants and education stabilization funds) or in the state single audit tests of school readiness programs, Patnaught said.

Despite the clean opinion, Patnaught told the board the audit identified two material weaknesses and several significant deficiencies related to year‑end reporting and reconciliations. One material weakness involved accounts payable year‑end procedures: testing found material liabilities and related revenues that were not reported in the town's accounting records as of year‑end, which required material audit adjustments. Another related to capital asset adjustments and recommended review of disposals and formal review processes to ensure additions are captured.

Patnaught recommended steps to strengthen internal control: improve year‑end financial reporting procedures, ensure procurement over bid thresholds is competitively bid, segregate incompatible duties in the education accounts‑payable process where possible, record cafeteria sales at the point of sale (or reconcile deposits to POS reports), and record scholarship and passbook funds in the general ledger. She said auditors would file required reports with the state and that corrective action plans may be uploaded separately after the financial statements are filed.

Board members asked how long repeated findings can carry forward; Patnaught said she focuses on measurable progress and noted turnover and staffing constraints can slow remediation, but she warned that no progress over multiple years would create concerns for the state.

The board received the presentation and engaged in a question‑and‑answer session; auditors said they will continue to work with town staff as the 2026 audit approaches.