FENWICK ISLAND – Officials say a recent audit of Fenwick Island’s financial statements revealed no major findings for the fiscal year ending July 31, 2022.
On Wednesday, the Fenwick Island Audit Committee voted unanimously to accept a fiscal year 2022 audit report from PKS & Company and to make a favorable recommendation to the Fenwick Island Town Council. PKS representative Alyssa Revell noted the auditing firm was presenting the town with a clean, unmodified opinion.
“We are happy to report we’ve issued an unmodified opinion, which is the highest level of assurance we can give you …,” she said. “We did not have any instances of noncompliance or material weaknesses.”
Councilman and committee chair Bill Rymer noted, however, that PKS had identified an issue relating to the town’s ability to create annual financial statements.
“It’s saying the town runs a general ledger package but doesn’t have the sophistication to pull together this 48-page financial statement,” he explained. “Our town and most towns don’t have the financial expertise to create this document.”
In fiscal year 2022, the town reported an unrestricted net position of $1.5 million, which represents an increase of $483,000. PKS representative Ashley Stern said the town’s financial position currently exceeds Government Finance Officers Association (GFOA) recommendations.
“The GFOA recommends that amount be at a minimum of 60 to 90 days of operating expenses …,” she explained. “You are not deficient and are right at about six months of operating expenses.”
Under the town’s statement of activities, total expenses remained consistent while total revenues decreased by roughly $400,000. Stern said that decrease was a result of declining realty transfer tax.
“Last year was a big year for real estate,” she said. “So that decrease is expected.”
Under governmental funds, officials noted the town had an unassigned general fund balance of $706,000. Revenues increased by $311,000 as a result of increased building permits, grants and gross rental taxes. Increases to police salaries and capital outlay resulted in a $148,000 increase in expenditures.
Comparing budget to actual, Stern noted that revenues were over budget by $606,000, while expenditures were under budget by $1.5 million. Councilman Bill Rymer, committee chair, noted that difference was a result of uncompleted dredging and sidewalk projects.
“If you remove capital outlays from expenditures, expenditures were very much in line with expectations,” he said.
With no further discussion, the committee voted unanimously to accept the final audit report and recommend that the town council accept the audit report.
The committee this week also highlighted ongoing efforts to protect the town’s finances. Rymer noted that $3.4 million of the town’s cash was now under FDIC protection.
“In last year’s audit report, the town had $3.3 million in cash on hand,” he said. “Of that, about $1.6 million was not under FDIC protection. So our focus for 2022 and going forward is trying to maximize the number of funds we have under FDIC protection.”
Rymer added that the town was working with Bank of Ocean City and the InterFi Network to protect the town’s finances. He also applauded the bank for adding a second layer of protection for the town.
“Bank of Ocean City has purchased $4 million worth of bonds, which are used as backstop collateral on behalf of the town,” he added. “So Bank of Ocean City has gone above and beyond.”
Rymer told committee members the town currently held $5 million in cash on hand.
“Big picture, our number one asset in this town, other than our people, is cash …,” he said. “So we try to protect that cash as much as possible.”
