FARMVILLE — The Town of Farmville received an unmodified opinion with zero findings on its 2022-23 fiscal year audit from independent auditor firm Barrow, Parris and Davenport. An unmodified opinion with no findings is the highest distinction given for a municipal audit.
Audit findings were presented by auditor Jay Parris during the Board of Commissioners meeting on Jan. 8.
“All your opinions are unmodified and clean. You have no findings for this year. That’s tremendous for a town with a $20 million plus budget and for a town the size of Farmville,” Parris said.
The auditor did note two performance indicators that serve as warnings for future budgets and acknowledge weak points in the town’s finances.
The first was the timeliness of the audit report. The audit report was due to the state by Dec. 1, 2023, however, Parris submitted the audit in January. This was due to unforeseen circumstances including medical issues with a key finance staff person as well as the death of the mother of another key finance staff member during the audit process. Staff illness within the audit firm also contributed to delays in completing the audit.
The second finding was found in the town’s electric fund reserves. The town’s electric fund reserves are used to ensure the town can replace and maintain its electric system and assets should a sudden need — such as a hurricane taking down transformers and poles — arise.
The town is required by the state to set aside 16 percent of operating expenses as a reserve. The town currently has 12 percent. The town has had this performance indicator in the past, according to Parris, and has been successful in increasing the size of the reserve over the course of the last year. This was accomplished by eliminating debt from the electric fund as well as a modest electric rate increase.
“You are addressing it and dealing with it,” Parris said, adding the town will need to continue to monitor its fund reserve balance. “You are about to be out of that issue,” Parris said.
The town has also improved the health of its water fund reserves by cutting expenses, retiring debt, and raising rates, he added.
Parris noted that the town’s sewer fund is operating with a slight surplus. “Your sewer fund is holding its own. Any small town in eastern North Carolina is going to be happy to have it over the line a little bit,” Parris said.
The town’s unreserved fund balance is 35.62 percent and is in line with the Local Government Commission guidelines. The LGC suggests that about 36 percent be set aside in reserves.
The town’s property tax rate of .49 per 100 also remains unchanged and has for many years, Parris said. The town’s tax collection rate is 99.3 percent, he added.
Parris thanked town staff for all their efforts in producing the audit and commended the town on taking actions to improve the town’s financial condition over the years.
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