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Pearsall councilors have voted unanimously to accept the 2022 audit after learning the city’s finances are sound.
Auditors Armstrong, Vaughn & Associates, PC, highlighted a number of internal control procedures that require improvement.
“I am not excited about the findings,” Mayor Ben Briscoe said during the Tuesday, May 2, meeting. “But the previous CPA gave us cookie-cutter findings that are specific, so we can work on them.”
According to the audit report, the city’s total combined net position was $16.9 million as of September 30 last year, with the city’s operating expenses $2.7 million less than the $8.6 million generated in revenues.
A fund balance of an unassigned $3.3 million provides the city with a three-month operating expenses reserve reflecting the financial health of the city.
“I am really excited about the fund balance,” the mayor said. “Our goal is to get to a six-month operating reserve.”
The report states that the balance of the city’s general fund increased by $595,000 for the 2022 fiscal year. The increase largely relates to increased revenues for permits by $67,000, interest revenue by $26,000, and fines by $19,000. The general fund also received a transfer in of $233,000 from the American Rescue Plan for CARES Act spending. Additionally, expenditures for the city manager department were under budget by $242,000.
Although auditors found the city in sound financial state, their report highlighted significant internal accounting policies that require immediate attention.
“We believe the information provided in the audit is beneficial to the city and helps us improve how we operate,” City Manager Federico Reyes said this week.
The full audit is available on the city’s website.