FENWICK ISLAND – Improvements in the town’s financial statements highlighted a recent audit in Fenwick Island.
Last Friday, the Fenwick Island Town Council voted unanimously to accept the fiscal year 2022 audit report from PKS & Company. Councilman Bill Rymer, chair of the town’s audit committee, noted the financial statements revealed no major findings.
“The audit committee met with the auditors on Jan. 11 to review the documents in the overall audit,” he said. “The auditors provided a clean, unmodified opinion, which is the highest level of assurance, and there are no material weaknesses identified.”
Rymer noted, however, that PKS had identified a significant deficiency relating to the town’s inability to provide a full set of financial statements.
“The town has maintained this same significant deficiency report for many years, similar to other towns and municipalities, especially the ones of our size, because the municipalities don’t have the in-house expertise to provide the 45-page footnote disclosures and all of that …,” he explained. “The audit partner actually mentioned a majority – close to 90% – of municipalities receive the exact same deficiency notification. So there’s nothing new on that front and certainly not a recommendation to hire any expertise to bring in-house once a year.”
During this month’s audit presentation. PKS reported the town had an unrestricted net position of $1.5 million, which represented an increase of $483,000 from the prior fiscal year. 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 said at the time. “You are not deficient and are right at about six months of operating expenses.”
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.
“The partner also discussed, during the process of reviewing records, financial statements and reconciliations were in much better shape this year and required far fewer audit adjustments,” Rymer told council members last week. “We definitely still have some work to do, but the significant progress was clear to our auditors.”