The audit was conducted by the independent accounting firm of Blackburn, Childers and Steagall. It was completed on Dec. 14 and released to city councilmen this week.
“Financially, the city is in good shape,” said Deborah Kessler, finance director for the city. She said the audit not only had no findings, but also did not identify any material weaknesses.
Kessler said the audit not only covered the city’s finances, but also those of the Elizabethton Electric Department, Elizabethton City School System, Elizabethton Golf Course, and Elizabethton Municipal Airport. Kessler was pleased that once again the electric department had no findings, after a finding on work orders was reported two years ago.
Kessler said the audit did not find any instances of the city being out of compliance with federal and state regulations on managing grants and awards.
The audit reported the city had total assets, including infrastructure of $164,723,804. The city’s liabilities totaled $84,185,347. That left a total net position of $84,185,347. Of this amount, $67,516,355 is invested in capital assets. The city’s net position increased by $2,739,777 during the year.
The city’s general fund had a fund balance of $7,364,956, which was 39 percent of the total fund. The unassigned fund balance was $4,078,006. The City Council has established a requirement that the minimum fund balance should be at least 15 percent of the operating budget.
The auditor said said the unrestricted fund balance net position was affected by the way the city accounted for debt incurred for school projects. The auditor said a $8.8 million school debt is carried as a liability on the city’s books, but the capital assets acquired by the debt are reported in the financial statement of the school board. The auditor said “the city has incurred a liability significantly decreasing its unrestricted net position with no corresponding increase in the city’s capital assets.”
The city’s long-term debt was $59,298,056. That represents a reduction in the debt of $3,082.090 from $62,380,146 in 2015.