Policy, Finance & HR Committee – December 10, 2024

Policy, Finance & HR Committee Meeting Recap – December 10, 2024

The Policy, Finance & HR Committee of the City of Asheville held a joint meeting with the Audit Committee on December 10, 2024, focusing primarily on a review of the City's Fiscal Year 2024 audit report. This virtual meeting, open to public listening and phone-in comments, provided an update on the city's financial health and discussed upcoming changes impacting how financial information is reported. Committee members included Mayor Esther Van Hemmer (chair), along with other council members and committee representatives.

The core of the meeting centered around a presentation from Finance Director Tony McDowell and the Cherry Becker audit team, detailing the results of the FY24 audit (covering July 1, 2023 – June 30, 2024). The audit received an unmodified (clean) opinion, indicating that the city’s financial statements are presented fairly and in accordance with generally accepted accounting principles. The committee also discussed the city’s unassigned fund balance, which currently stands at 16.8%, exceeding the city's policy threshold of 15%. Auditors explained the importance of external audits for transparency and compliance with state regulations, clarifying the process involved. A significant portion of the discussion also focused on upcoming changes to accounting standards from the Government Accounting Standards Board (GASB), specifically GASB 101 and 103, which will require adjustments to financial reporting in the future. The committee also touched upon the Local Government Commission's (LGC) performance indicator program and its relevance to assessing the city’s financial stability.

While no formal votes were taken during this meeting, several key actions and next steps were identified. City staff will be drafting a letter to the LGC regarding the fund balance, as required by their performance indicator program. A condensed version of the audit presentation will also be delivered to the full City Council later that evening, ensuring broader awareness of the findings. Looking ahead, planning for the Fiscal Year 2025 audit will commence in March or April. Auditors anticipate potential complexities related to disaster funding and FEMA processes, requiring proactive preparation.

There was an opportunity for public comment during the meeting, although no specific comments were reported in the provided transcript. Councilmember Kim Roney raised a point about improving budget forecasting accuracy, highlighting an area for potential improvement in future financial planning. Finance Director McDowell acknowledged the challenges of completing the audit amidst difficult circumstances and praised both his team and the Cherry Becker auditing firm for their dedication and flexibility.

Overall, the meeting conveyed a positive picture of the City of Asheville's financial standing. The clean audit opinion and healthy fund balance demonstrate responsible fiscal management. Residents should be aware that the city will soon need to formally respond to the LGC regarding its fund balance, and preparations are underway for potential complexities in next year's audit related to disaster funding. The upcoming changes in GASB accounting standards will also impact how the city reports its financial information, a detail that officials are actively monitoring.