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Town Auditor Reports Clean Opinion but Flags Year‑end Reporting Issue; Fund Balance and Capital Spending Highlighted
Summary
Town auditor Gary Bailey gave the fiscal 2024–25 audit a clean (unmodified) opinion while noting one technical finding on year‑end journal entries; council learned the town ended the year about $146,000 negative overall (driven by $4.44M in capital outlay, including a Greenbelt land purchase).
Mayor Brooke Lyon introduced auditor Gary Bailey, who presented the Town of James Island's fiscal year‑end audit for the year ending June 30, 2025. Bailey said the audit issued an unmodified (clean) opinion while identifying one technical finding related to financial reporting and year‑end classification journal entries. "That finding was really technical," Bailey said, stressing that the audit found no fraud or misuse of funds.
Bailey walked the council through five‑year trend lines showing general‑fund revenues of roughly $4.56 million and operating expenses of about $4.873 million for the year. He said combined hospitality, accommodations and stormwater funds left the town with a roughly $146,000 negative overall fund balance for the year, a result Bailey attributed primarily to capital outlay rather than operating performance. He noted $3.55 million in unrestricted cash and approximately $4.0 million in restricted cash at fiscal‑year end and said the town held about one year of operating expenditures in liquidity.
Council members asked follow‑ups about specific line items, including higher legal fees, increased salaries and benefits tied to officer pay, and the $4.44 million in capital outlay (Bailey identified the Greenbelt land purchase as the largest item, noting a $938,000 grant plus a $2.4 million note). Finance Director Mike Hemmer told the council he is monitoring the budget closely and will present the proposed budget at the upcoming budget workshop. Bailey offered to provide targeted training on year‑end journal entries and internal control refinements to reduce the likelihood of similar findings in future audits.
The auditor's presentation and the council's questions were oriented toward preserving the town's strong liquidity position while addressing the technical accounting items that produced the single finding. The council did not take a formal vote tied to the audit presentation; Bailey said he will be available for further questions and training.
