Third party completes audit of Longboat Key

An independent audit of Longboat Key’s fiscal year 2020 found the town’s financial statements are fairly presented in conformity with generally accepted accounting principles.

CPA and advisory firm Mauldin & Jenkins conducted the audit. Florida law requires local governments to provide an audit and annual financial report to the state no later than nine months after the end of the fiscal year.

“It’s just another extremely positive audit by a third party auditing firm that looks at our financial records for the previous years,” Town Manager Tom Harmer said. “And, part of that process, they will identify if there are any concerns or areas of improvement, but we have some history here of receiving very favorable audit reports that are very complimentary of our finance team, and this is another one.”

Harmer said Mauldin & Jenkins did not have any recommendations for the town to change its financial practices.

“The scope of the independent audit is to provide reasonable assurance that the financial statements for the fiscal year ended September 30, 2020, are free of material misstatement,” the audit states. “The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation.

Because the town did not spend more than $750,000 of federal expenditures or state financial assistance, it is not required to undergo a federal or state audit.

“I would like to recognize the Finance Director Sue Smith and the rest of the Finance Team for their efforts this year and the positive results reflected again in this year’s audit,” Harmer wrote in an email to town commissioners.

Among the financial highlights of the audit, Harmer said he was proud of how the town financially adapted to the COVID-19 pandemic.

“I think we’ve been very conservative, and this plays out in the audit as well, but very conservative in our forecasting of the impact of COVID last year when it first occurred, and that’s worked out [in] our favor,” Harmer said. “The impact has been less than when we first projected it to be, and so I think that part is really good.”

Harmer said the audit shows how the town’s revenues were higher than forecasted and the town underspent its approved budget.

“When the commission provides us a work plan and a budget for the year, we work really hard to accomplish those things within the budget, and if we can save any money, we’d like to do that,” Harmer said. 

Here are some of the financial highlights of the audit:

• Government fund balances of $68.4 million at the close of fiscal year 2020, which was a decrease of $2 million from the previous fiscal year. About $7 million is available for spending at the town’s discretion. The decrease in fund balance is attributed to the underground utilities project and “other capital outlay.”
• The general fund balance increased by $600,000 to $10.7 million. The increase was because of revenues exceeding estimates despite reductions in sales tax revenues from COVID-19, unspent contingency funds and the town underspending its appropriated budget.
• Changing the way Longboat Key holds reserve funding and calculates its potential use.