Audit report looked T town's financial condition
Assertions by some that the Town is operating in a fiscally irresponsible manner or facing financial trouble are not supported by the audit record. Over the past eight years, including the most recent audit, the town's independent auditors has consistently issued clean "going concern" opinions. They have not identified any condition suggesting financial distress.
Assertions by some that the Town is operating in a fiscally irresponsible manner or facing financial trouble are not supported by the audit record. Over the past eight years, including the most recent audit, the town's independent auditors has consistently issued clean "going concern" opinions. They have not identified any condition suggesting financial distress.
Foresees no immediate cause for concern
The Town’s independent auditor, Brian Hemmerle of the audit firm of Baker Tilly LLP, presented the results of Oro Valley’s fiscal year 2024–25 audit to the Town Council and earlier to the Budget and Finance Commission. The audit addressed whether there are conditions that could impair the Town’s ability to continue operating and meeting its obligations. Hemmerle found no such conditions. While the audit does not predict long-term policy outcomes, the auditor identified no financial difficulties or financial problems facing the Town in the immediate future.
The audit affirmed that the town is on solid financial footing, spending well below its expenditure limit and...
As part of the audit, the auditor also reviewed the Town’s compliance with Arizona’s voter-approved expenditure limitation. He reported that Oro Valley remained well below its authorized spending limit for the fiscal year, meaning the Town did not approach or exceed the legal cap on expenditures. In addition, the auditor stated that he identified no conditions or events that would raise substantial doubt about the Town’s ability to meet its obligations and continue operating as required over the applicable look-ahead period. Together, these findings indicate that the Town not only complied with its legal spending limits but also demonstrated the financial capacity to meet its ongoing commitments.
Rumors of future financial problems are based on a long-term forecast and not on audit findings
The only forward-looking concern that has been raised comes from a five financial forecast prepared by the Town’s finance staff, which showed a potential revenue shortfall of four years from now. That forecast formed the basis for a staff request that the Town Council consider new taxes, proposals that the Council ultimately rejected. Financial forecasts are inherently sensitive to assumptions and are not audit findings. In addition, the further out the projection, the less likely it is to occur. To date, nothing in the Town’s audited financial results or the opinion of the town outside auditor indicates current or near-term financial trouble.
The only forward-looking concern that has been raised comes from a five financial forecast prepared by the Town’s finance staff, which showed a potential revenue shortfall of four years from now. That forecast formed the basis for a staff request that the Town Council consider new taxes, proposals that the Council ultimately rejected. Financial forecasts are inherently sensitive to assumptions and are not audit findings. In addition, the further out the projection, the less likely it is to occur. To date, nothing in the Town’s audited financial results or the opinion of the town outside auditor indicates current or near-term financial trouble.
As part of the audit, the auditor also reviewed the Town’s compliance with Arizona’s voter-approved expenditure limitation. He reported that Oro Valley remained well below its authorized spending limit for the fiscal year, meaning the Town did not approach or exceed the legal cap on expenditures. In addition, the auditor stated that he identified no conditions or events that would raise substantial doubt about the Town’s ability to meet its obligations and continue operating as required over the applicable look-ahead period. Together, these findings indicate that the Town not only complied with its legal spending limits but also demonstrated the financial capacity to meet its ongoing commitments.
...with strong reserves
The audited financial report also shows that the Town ended the fiscal year with a General Fund balance of $20.7 million, equal to about 39 percent of annual General Fund expenditures. This reserve level is well above the Town Council’s adopted policy threshold of 25 percent. While auditors do not set or evaluate reserve policy, they do verify that reported balances are accurate and available. The absence of any audit findings or concerns related to reserves indicates that the Town’s General Fund balance is correctly reported and provides a substantial financial cushion to manage revenue fluctuations, unexpected costs, or economic uncertainty.
A "Clean Opinion: " The financial results as reported can be relied upon
Hemmerle reported that the Town received an unmodified, or “clean,” audit opinion. This opinion confirms that the Town’s financial results are accurately reported, free of material misstatement, and prepared in accordance with required accounting standards. The audit does not evaluate policy choices or future decisions, but it does confirm that the numbers relied upon by residents, council, and outside parties are reliable.
- - -
- - -