BAILEY — Commissioners received positive feedback on the city's 2024 audit, which was presented in data packages last week by Lee Grissom of S. Preston Douglas and Associates LLP.
The Ocean Isle-based accountant spoke modestly Dec. 16 about just one internal control finding – funding segregation of duties – which was expected given the city's annual hiring budget.
“If your office staff is smaller, it's difficult to manage that without hiring additional staff,” Grissom said. “We expected your office to have done a great job… we have issued an unmodified opinion – that is our highest level of assurance that an independent accounting firm can present or issue in the financial filings – really, the last three financial years have been very , very strong.”
Grissom also praised the work of City Manager Joel Killion in meeting this year's filing deadline on time.
ASSETS AND LIABILITIES
As of June 30, the city reported total assets of $6.3 million, offset by liabilities of $503,000, creating a net position of $5.8 million – a figure Grissom welcomed.
“This is an increase in net position for the fiscal year of $446,000,” Grissom said. “Their tax collection rate was about 99%, on par with the previous fiscal year… we had a small error that we corrected in an adjustment for a previous period related to a funding seal that we cleaned up. But given the nature of this error, we did not report this as a finding.”
FUND CALENDAR
Bailey's total fund did shrink in 2024 – by $139,000, to be exact – but since it was a budget item, that wasn't a number that weighed on the audit process.
“It went from $1.15 (million) to just over $1 million,” Grissom noted. “But overall, this is your third-highest fund holding in the total fund in nine fiscal years.”
In addition, SPD&A submitted a data entry sheet to the Local Government Commission, which was satisfied with the number of months in the city's general reserve fund.
“That essentially means you have about nine months of unallocated fund balance in reserve to cover general fund expenses,” Grissom noted. “So you’re in a pretty good spot.”
Although the city currently meets the minimum LGC threshold of 71%, the agency recommended adjustments to increase the general fund.
“You really want the average of similar units to be 132%,” Grissom noted, “but as I said, the Local Government Commission expects you to reach 103% for this fiscal year.”
ADDITIONAL FIGURES
Total cash was $1.3 million in 2024 – a decrease of $117,000 from 2023 – but was about average for the last seven years, according to Grissom.
The city's long-term debt was $410,000, while water and sewer financing suffered a loss of $70,000 – but that's not unusual given the challenges facing municipalities.
“It's not uncommon – just to put it in context – to see negative income before contributions are transferred,” Grissom explained, “primarily because you're trying to cover capital appreciation expenses that are non-cash expenses.” ”
Bailey's 2024 water and wastewater fund net position was just under $3.3 million.