The Roseboro Town Board hears good news from their auditor during a remote presentation of the results of the fiscal year 2024 audit, which showcased a positive growth trend.
                                 Michael B. Hardison | Sampson Independent

The Roseboro Town Board hears good news from their auditor during a remote presentation of the results of the fiscal year 2024 audit, which showcased a positive growth trend.

Michael B. Hardison | Sampson Independent

ROSEBORO — The town’s financial standing is trending in the right direction according to an end-of-fiscal-year 2024 audit which showed positive growth.

“I appreciate the opportunity to present the June 30, 2024, audit results,” auditor Lee Grissom said during a remote conference call with town board members.“This is our fourth year auditing the Town of Roseboro, and I am happy to present this; it’s mostly going to be positive news. The graphs are positive, and looking at the last eight years of fiscal year information, overall, the town’s trending in a very positive way.”

At Roseboro’s January town board meeting, Grissom presented the town’s final audit for the fiscal year ending 2024. During his presentation, he attested that Roseboro’s audit received an unmodified opinion which is the highest level of opinion that can be given to a municipal government’s financial statements.

In Grissom’s report, he provided the board financial graphs showcasing the particulars of Roseboro’s growth. The first example was “Announces of Fund Balance,” general fund.

“That is all your governmental funds added up together,” Grissom explained. “As you can see on the graph, 2024, this is the highest the town’s been in eight fiscal years. So, you’re at about $3.1 million fund balance in your governmental fund. Just to point out, in this fiscal year 2024, there was an increase of $67,000 in your governmental fund balance. Again, that’s the highest fund balance in the last eight fiscal years so that’s a very nice trend on that first one.”

The second graph was for what Grissom called “Number of Months in Reserve,” which is the town’s fund balance.

“Available fund balance provides cash flow during periods of declining revenues and can be used for emergencies and unforeseen expenditures,” Mayor Alice Butler said.

Grissom’s graph showed Roseboro had 18 months in the reserve fund balance which showed the town’s cash reserve exceeds 150 percent of annual expenditures.

“This is the one that the Local Government Commission is always very interested in. I have this as a percentage and I have it converted to how many months,” he said. “This is how much the town has in reserve…”

He continued, “So for 2024 you’re at 18 months in reserve for 150 percent, that’s really, really good. The minimum percentage would have been 34 percent of what the Local Government Commission wanted; you’re well above that minimum. The average would have been 63 percent so you’re well above the average as well. For the last eight fiscal years, the town’s been in good shape as far as this metric, that being, having a kind of a rainy day fund in your general fund.”

That was a drastic change, Butler stressed, noting, “in 2017, the town had 97 percent of expenditures but back in 2012, it was at 22 percent.”

Grissom also said the town’s total cash, all funds, had jumped up significantly over the last eight years. In 2017, that figure was $1.6 million, one that has trended upwards in 2023 to $2.3 million. That number in 2024, however, increased to $8 million but Grissom said a large portion of that was already designated to be spent.

“This fiscal year, you’re at $8 million, so you had a $4.7 million increase,” he said. “That’s from the fire station project cash which is around, I think, $4.2 million in June 30, 2024, so that money is going to get spent.”

The other graph he discussed was the town’s progress towards their long-term debt, information auditors and the Local Government Commission were happy to see

“This is definitely, from an audit standpoint, this is what you want to see, your debt being paid down a pretty conservative amount,” he said. “As of June 30, 2024, your debt is at $220,470, that’s basically the financing for the fire truck payable through 2032 at a 2.85 percent interest rate.”

The graph showed that in 2017, the town’s debt was $853,395 meaning the town’s long-term debt has decreased over $600,000 in the past seven years.

Grissom also noted there was no significant audit findings as far as the compliance field work they completed. While true, there were some outliers that he brought to the board’s attention, saying they were not major concerns, but worth mentioning.

“We did have a segregation of duties finding which we’ve had every year the last four fiscal years,” he began. “Basically what that gets at, as I’ve mentioned in every presentation I do for the Town of Roseboro … because the business office is smaller, as far as the number of staff, you can’t separate the duties as would be ideal.

“What that means typically, is your finance officer or clerk are doing a few too many tasks,” he added. “Therefore, we include in the compliance section a finding as it relates to the segregation of duties. Internal controls are kind of a cost benefit thing, so it would cost more money, generally, to hire additional employees to try to separate those duties. And so, a lot of smaller municipalities do have that finding. So it’s not unusual.”

The other point Grissom touched on was the need for Roseboro to send a response letter in regard to water sewer depreciation.

“There was one metric that the town is going to need to respond to in a letter similar to the previous year related to your water-sewer fixed asset,” he said. “That’s nothing to be concerned about, but I’ll touch on that.

“What that’s getting at is that your water-sewer fixed asset on the audit report is showing it has depreciated more than 50 percent, which indicates to the Local Government Commission that it may need to be replaced in the near future. You’re at 45 percent and so not too far away from the 50 percent. You had that exact same item to respond to last year, so you’ll have that this year, but I don’t think that’s alarming.”

The remaining item he alluded to was the need to increase the fidelity bond coverage for the town’s finance officer, a matter town officials were already on top of, according to officials.

“Of priority this year with the Local Government Commission is related to the fidelity bond coverage,” Grissom said. “I had several municipalities this year, because of the focusing on this, that noted that the fidelity bond coverage for your finance officer was a little bit short. Your coverage, at the time of the audit, was $100,000, which covers if say there was a misappropriation of assets, that would be covered by insurance on your finance officer.

He continued, “They want that coverage to be 10 percent of your annual budget. That would be, generally, your general fund and your water sewer budget, it should be 10 percent of those budgets.”

Grissom said the amount should’ve been an estimated $137,000, but since the audit the town has increased their bond coverage from $100,000 to $300,000.

“That increase will provide a little bit of buffer so this wouldn’t be an issue in the future, and we did not report this as finding,” Grissom attested. “It is in the audit report, but it’s not missing enough to make that a finding. That will be another thing that the town is going to need to respond to the Local Government Commission in a letter.”

Also of note, he said, Roseboro’s property tax collection percentage in 2024 was just under 95 percent. That number was on par with the previous eight years but is lower that the state average which was between 98 to 99 percent.

“In summary, we issued an unmodified opinion, that’s our highest level assurance,” Grissom said concluding. “Other than the segregation duties finding we noticed, the books were in good shape. The fidelity bond coverage needed to be increased but we thought that was minor, and the Local Government Commission metrics were, overall, very favorable, other than a couple of minor things I mentioned. So overall it was a good audit from our standpoint.”

Butler expressed her confidence in the town’s audit, giving much of the credit to their finance team. She stressed that going forward taxes were a major focus.

“I am extremely pleased with our audit,” she said. “Deputy Finance Director Annette Jackson does an awesome job along with the support of the other ladies in the office. Our entire team knows the importance of watching our budget and making sure we keep expenses in line with our revenues.

“Taxes are always a big discussion,” Butler added. “Every year our town board evaluates whether it can cut taxes. Over the past 10 years, we have cut taxes .08 cents per 100. With the new county property evaluation increases this year, we kept our taxes at a tax-neutral rate. Our current rate is now .46 cents per 100. During this year’s budget process, we will again re-evaluate our tax rate.”

Reach Michael B. Hardison at 910-249-4231. Follow us on Twitter at @SamsponInd, like us on Facebook, and check out our Instagram at @thesampsonindependent.