Auditors presenting Fayetteville's 2024 financial statements told the Board of Mayor and Aldermen on Feb. 6 that the statements are fairly presented under generally accepted accounting standards, but the audit identified one material weakness related to the city's recent conversion of its accounting system.

Dan Hancock, lead auditor for Buckland & Hancock, summarized the audit and told the board the report includes five findings, one characterized as a material weakness tied to the conversion to the new financial system in September 2023. Hancock said other findings were deficiencies rather than material items and that management has taken corrective steps.

The findings were described during a longer presentation of the audited financial statements and supporting management discussion and analysis. Hancock recommended the board approve the statements at the next regular meeting so staff can submit them to the state comptroller’s office for review.

Finance Director Loretta Bonner and Hancock also reviewed key numbers in the report: government-wide net position rose by about $21.7 million in 2024, a change substantially driven by bond proceeds; excluding those proceeds, the city's operating results declined compared with 2023. Cash and debt-service-coverage ratios were presented as healthy by Hancock, who noted overall debt-service coverage remains well above commonly used minimums.

City staff also reported they received three responses to the city's request for qualifications for audit services and recommended Matlock Plymouth of Murfreesboro as the next audit firm. The recommendation will be brought to the board for consideration at the next business meeting.

Separately, staff presented a budget amendment package that would, if approved at the formal meeting, record several items in the current-year budget including: a donation from Leadership Lincoln for the baby-box project; previously approved attorney health insurance; building maintenance and parking repairs at the municipal building; a $15,000 donation earmarked for tourism; and an $8,800 emergency rental for a replacement garbage truck. The board was asked to move the budget amendment forward to the Feb. 11/Tuesday meeting for action.

Hancock concluded by noting Buckland & Hancock will not perform future audits for the city; the firm said it will continue to provide non-audit accounting services on request.

The board did not vote on the audit acceptance or auditor selection at the Feb. 6 work session; staff will present the formal approvals at the next meeting.