Tobacco Securitization Authority audit: clean opinion despite $894,000 loss

Nicole reported the Tobacco Securitization Authority audit issued in March received a clean, unmodified opinion and required no adjusting entries. "We issued the audit report back in March. Um it's a clean unmodified audit opinion," she said during the committee meeting.

Nicole told the committee the corporation recorded an overall loss of about $894,000 and made $525,000 of principal payments on debt during the period under review. She warned that the primary financial risk is declining tobacco revenue and a shrinking tobacco user population that is expected to continue reducing that revenue stream.

The auditor also noted that the new accounting standard GASB 102 had been adopted but did not change the organization's disclosures; the changes address risk disclosures related to concentrations and constraints and had no impact on the Authority's financial statements. Nicole said there were no material weaknesses or significant deficiencies included in the Yellow Book report, and she proposed no accounting adjustments.

The committee asked follow-up questions about whether any bonds were variable-rate or redeemable, but staff did not have immediate answers and said they would follow up. No vote or formal action accompanied the audit presentation beyond the committee's opportunity to ask questions.