Carefree council accepts FY2025 audit, corrects $1.9 million accounting error and designates clerk as CFO

The Town of Carefree Common Council on Feb. 3 accepted the fiscal year 2025 audit and approved a routine resolution designating the town clerk/treasurer as the chief financial officer to submit the annual expenditure limitation report. The audit presentation included a clean (unmodified) opinion and a correction to a prior‑period accounting classification related to the town's water activities.

Lupita Martinez, principal with CliftonLarsonAllen, told the council auditors ‘‘examine and verify management's assertions over the financial numbers’’ and issued an opinion that the financial statements were free of material misstatement. Martinez said the audit identified a prior‑period accounting error from the transfer of assets to the water company that involved $1,900,000 and was corrected by reclassifying the amount from unavailable revenue to nonspendable fund balance. ‘‘That error was corrected, and that is in our audit opinion,’’ Martinez said.

The audit included other non‑material uncorrected items that auditors documented for future adjustment: bond premium amortization for $144,000, a Verizon land‑lease that had not been recorded for $185,000, and an other post‑employment benefit asset not recorded for $59,000. Martinez emphasized these items were not considered material to the overall financial statements.

Martinez summarized key balances: total town assets of roughly $38.6 million, liabilities near $2 million and a net position about $36.6 million, with $16.1 million invested in capital assets and an unassigned general fund balance of approximately $17.8 million. She also reported the town was within the voter‑approved expenditure limitation: the limitation was $12,856,267 and the amount subject to limitation was $10,495,812.

Kristen Cray (identified in the agenda packet as the town clerk/treasurer) explained the resolution to designate the current clerk as the official signer for the FY2025 annual expenditure limitation report to the Auditor General, correcting a prior designation that referenced the prior clerk. The council voted to approve the CFO designation resolution and the audit acceptance resolution; both motions passed without recorded opposition.

The auditor also told the council that two recently adopted Governmental Accounting Standards Board pronouncements (one on compensated absences and another on risk‑disclosure requirements) had been implemented and ‘‘had no material impact on the numbers.’’ Martinez said the audit found no instances of noncompliance in the Highway User Revenue Fund sample testing performed under Arizona Revised Statutes Title 28, Chapter 18, Article 2.

The council approved the related resolutions by voice vote and accepted the audit. The clerk will transmit the corrected documents and the annual expenditure limitation report as required by state procedures.