The City of Andalusia increased its net position for the seventh consecutive year, auditors told the Andalusia City Council on Tuesday.
Missy Pierce, CPA, and Gail Hayes, CPA, from Rabren, Odom, Pierce and Hayes, P.C. presented a draft of the city’s audited financials for fiscal year 2021 Tuesday night. The auditors reported no findings.
Pierce said the City of Andalusia increased its net position by $4.3 million, as compared to FY 2020, partially because a strong economy produced a 7 percent increase in sales tax revenues.
“The city is in the strongest financial position it has ever been in,” Mayor Earl Johnson said. “This is over-the-top good news for the city, and it is because of the guidance of the council and the contributions of everyone who works for the city.”
Other highlights of the audit included:
• The City had a combined ending fund balance of $17.9 million, and increase of $3.2 million from the previous year.
• The City had a $3.2 million increase in the cash balance, more than half of which is unrestricted.
• The City financed $1.1 million in capital assets and construction, including an excavator, garbage truck, and work on the Covington Casket building in the industrial park. The company is purchasing the building from the city.
• The City made payments of just more than $2M on its long-term debt.
• The City’s program expenses increased by 8.4 percent over the previous year, a number that was artificially inflated by pandemic furloughs during the 2020 fiscal year.
The City’s sales taxes have shown a 26 percent increase over the past five years.
“This is the first time I recall not a single finding of any kind on our audit,” the mayor said. “I think that’s worthwhile to talk about and to let people know.”
In recent years, the only finding has been relevant to a relatively new federal standard. The finding was addressed with additional training for employees in the city’s finance department.
“The mayor, city administrator, and council have taken action to address that finding, which was the result of very recent federal guideline that had come down. We have addressed that, and no longer have that finding.”
“Our opinion is ‘Unmodified,’ which is the best we can give,” Hayes said. “The internal control report has no opinion and no deficiencies.”
John Thompson, city administrator, said the audit reflects a months-long process that began in January.
“They really dig into every aspect of the city’s finances,” he said. “If the council approves a development agreement, the auditors want to sit down and have us explain it. It’s significant that this audit was completed without a finding, a citation or anything irregular going on in this $20 million annual business.”
The Council is expected to approve the financial statements at the July 19th meeting.