Berlin audit: FY25 receives clean opinion; fund balances up about $1.5M
January 12, 2025 | Berlin, Worcester County, Maryland
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TKS & Company presented the Town of Berlin's fiscal year 2025 audit on Jan. 12, telling the Mayor and Council the firm issued a clean (unmodified) opinion on the town's financial statements and identified no material weaknesses in compliance testing of federal programs.
Audit partner Andrew Heen said the general fund recorded about $10.8 million in revenues and $9.8 million in expenditures for FY25, with net other financing sources of roughly $460,000 leading to an approximately $1.5 million increase in fund balance. Heen said the town's unrestricted portion of fund balance stood at about $12.3 million, representing roughly 15 months of operating expenses, and characterized the town's fiscal health as strong.
"We are happy to report a clean or unmodified opinion, which is the highest level of assurance that we can give as auditors," Heen told the council.
Manager Alyssa and finance director Natalie Slay walked council members through notable items in the reports, including a required single-audit because the town spent more than $750,000 in federal awards during the year and details on enterprise funds. The electric fund showed an operating income of about $261,000 but down from the prior year; wastewater and stormwater funds showed mixed operating results tied to personnel and capital activity.
Auditors also highlighted the effect of recent accounting pronouncements requiring recognition of accrued compensated absences (sick leave and similar liabilities). Heen said adoption increased accrued liabilities in Berlin by about $108,000 in the prior-year restatement and the accrued amount for 2025 was roughly $689,000.
Council members asked for clarification about fund-balance classifications and long-term debt. Heen and staff pointed the council to detailed schedules and page references in the audit packet for specific bond and lease balances.
Mayor Zach thanked the audit team and finance staff. Natalie Slay said the town's work on sewer-fund balances and the payoff of interfund due-to balances were key accomplishments during the year. Slay also noted the town will present a budget amendment in February to reflect updated slot-revenue allocations.
The audit presentation is available in the council packet for further review; council members said they would follow up on particular schedules and bond details as needed.
Audit partner Andrew Heen said the general fund recorded about $10.8 million in revenues and $9.8 million in expenditures for FY25, with net other financing sources of roughly $460,000 leading to an approximately $1.5 million increase in fund balance. Heen said the town's unrestricted portion of fund balance stood at about $12.3 million, representing roughly 15 months of operating expenses, and characterized the town's fiscal health as strong.
"We are happy to report a clean or unmodified opinion, which is the highest level of assurance that we can give as auditors," Heen told the council.
Manager Alyssa and finance director Natalie Slay walked council members through notable items in the reports, including a required single-audit because the town spent more than $750,000 in federal awards during the year and details on enterprise funds. The electric fund showed an operating income of about $261,000 but down from the prior year; wastewater and stormwater funds showed mixed operating results tied to personnel and capital activity.
Auditors also highlighted the effect of recent accounting pronouncements requiring recognition of accrued compensated absences (sick leave and similar liabilities). Heen said adoption increased accrued liabilities in Berlin by about $108,000 in the prior-year restatement and the accrued amount for 2025 was roughly $689,000.
Council members asked for clarification about fund-balance classifications and long-term debt. Heen and staff pointed the council to detailed schedules and page references in the audit packet for specific bond and lease balances.
Mayor Zach thanked the audit team and finance staff. Natalie Slay said the town's work on sewer-fund balances and the payoff of interfund due-to balances were key accomplishments during the year. Slay also noted the town will present a budget amendment in February to reflect updated slot-revenue allocations.
The audit presentation is available in the council packet for further review; council members said they would follow up on particular schedules and bond details as needed.
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