CHINA GROVE — A clean audit report of China Grove’s fiscal year was presented before the town council on Tuesday during its regularly-scheduled monthly meeting.

Lee Grissom of S. Preston Douglas & Associates shared his firm’s findings with the council.

“First off, the good news, we issued an unmodified opinion,” Grissom said. “That is also referred to as a clean opinion … Basically what that is saying is that you can rely on these financial statements.”

Grissom commended China Grove officials for the submitted filings.

“The Local Government Commission really wants those reports in, so it is a high priority,” Grissom said. “I really give a lot of praise to your business office to get that out and all the information so we can draft this report and issue our opinion before the deadline.”

Grissom indicated that they found no issues with internal controls on the audit.

“We had very few adjustments needed on the financial information provided during the course of the audit so the books were in good shape,” he said. “There were no new accounting policy changes that were material this year and we did not consult with other auditors.”

Grissom said that when they submit an audit each year, they are required to a complete a data input sheet.

“It’s sort of a self reporting spreadsheet where the local government commission looks at a lot of financial metrics and compares them to other municipalities,” he said. “I am happy to report there were no financial performance indicators of concern. That is a very big deal. I do a lot of governmental audits and I would say at least half of municipalities have some type of financial performance indicator of concern that the town has to respond to.”

China Grove’s total net position in June 30 was $6.8 million, which represents an increase of $427,000 from the previous year. However, the General Fund did have a “slight” decrease of $97,600 this year.

“The fund balance, there were no issues with the budget,” Grissom said. “There were no overages or internal control findings that we came across.”

Grissom presented the past eight years of fiscal information, including an analysis of fund balance for governmental funds.

“It’s kind of your equity for governmental funds in the last eight fiscal years,” Grissom said. “We’re at about $4.9 million in fund balance. That is the second highest fund balance of the last eight years for the town of China Grove. That is about a $98,000 decrease in the general fund. So that is the difference between 2023 and 2024.”

Another indicator Grissom discussed was the number of months in reserve general fund.

“This represents the emergency fund for your general fund,” Grissom said. “This is unassigned fund balance divided by general fund expenditures. It comes up with a percentage, so 100 percent would be 12 months of reserve in your general fund.

“The account is in good shape as I mentioned before, when we submitted the data input sheet to the Local Government Commission, they were satisfied. This is one of the metrics they were looking at. So in 2024, you are at 61.54 percent, so that is about seven months in reserves. That is a decrease from the previous fiscal year but it is the second highest balance for the town in eight fiscal years.”

Offering context, Grissom said that the minimum threshold would be 34 percent, so “the town is basically twice the number the local government commission would want you to be at as far as the minimum.”

According to Grissom, property tax collection in 2024 was by the far the highest in the last eight fiscal years.

“You had an 11 percent increase in property tax collections or $224,000,” Grissom said. “The tax collection percentage was 98.94 percent. That was basically comparable to the previous fiscal year which was 98.54 percent.”