Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the City Finance Audit topic
No spam. Unsubscribe anytime.
Auditors report clean regulatory opinion, flag $866,949 missed encumbrance
Summary
Adams Brown told the Hillsborough City Council the 2025 financial statements received a clean regulatory (KMAG) opinion but auditors identified a material weakness: a missed year‑end encumbrance of $866,949 and recommended monthly review of payroll liability accounts.
Delaney Smith, of audit firm Adams Brown, presented the city's 2025 audit and said the firm issued an unmodified opinion on the regulatory (KMAG) basis while the city waived US GAAP presentation. "We did have one material weakness that we wanted to note this year...a missed encumbrance...of $866,949," Delaney Smith said.
Smith recommended monthly review of payroll liability accounts, including FICA and FSA accounts, and advised that appropriations be dispersed in the year funds are received as budget authority allows. She reported the city's ending unencumbered cash on 12/31/2025 was just over $1,600,000 and noted long‑term debt on the schedule was just over $20,000,000, including amounts tied to the public building commission.
Council asked clarifying questions about the bowling‑alley fund and a statute compliance finding; Smith said expenditures had exceeded budget authority for that fund. City staff acknowledged the findings and thanked the auditors for a thorough review. The council did not take immediate action beyond accepting the report and noting recommendations for internal controls and encumbrance procedures.
