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A recent review of the city’s books revealed confusion and gaps in Elgin’s fiscal direction, but third-party auditors ultimately found the city’s finances in good shape — a conclusion that left lingering questions for some.
In its annual audit for the fiscal year ending September 2024, independent auditors issued an unmodified opinion — the highest level of assurance that city financial statements are accurate and free of material misstatements.
The 100-page report from certified public accounting firm BrooksWatson & Co. recommended improvements in tracking, internal controls and staffing to strengthen financial oversight and transparency.
While auditors said they found no instances of wrongdoing, officials acknowledged that sloppy recordkeeping, accounting practices and lapses in administration leave shortfalls for Elgin to address.
Still, not everyone agreed with the favorable verdict.
“We have the right as constituents and residents to know where our money was spent and how it was spent,” Councilwoman Tiffany St. Pierre said.
LOOKING BACK
During a heated review of audit findings Oct. 21, council members debated whether to pursue a forensic audit to further examine financial activity in prior years.
“I think your numbers can be right, but things can be sloppy,” Councilwoman Joy Casnovsky said. “We’ve got some cleaning up to do in terms of our internal controls, pool accounting and understanding where our pools of capital are coming in.”
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May or The r e s a McShan said focusing on the future is more productive.
“We need to figure out what we’re going to do going forward. I’d love to know what went on then too, but I wasn’t on the council then, nor was I mayor,” McShan said. “I don’t want to spend months and years looking back — I want to go forward.”
St. Pierre continued to voice concerns about past spending and what she described as an obligation to residents.
“We can go forward and also have the right to look back,” she said. “I want to spend months and years to go back. I want to know where my tax dollars were and my constituents want to know where their tax dollars went.”
The council briefly reviewed what a forensic audit would mean for the city. Officials said guidelines and timelines would need to be set before a firm can be hired at a potential cost of more than $200,000.
“It’s not just general snooping,” Interim City Manager Robert Eads said. “You do have to put a scope out there for what you’re looking for. It will be different for different cities.”
The council is expected to hold a workshop to discuss audit findings further and consider whether to pursue a forensic review.
THE NUMBERS
The audit paints a picture of a city experiencing both growth and growing pains.
The report placed Elgin’s total net position at $57.6 million — up $9.5 million from the previous year — reflecting an overall positive financial position, according to firm partner Mike Brooks. The city’s combined governmental fund balances totaled $6.1 million — down $10.3 million — which he said was largely due to one-time capital purchases and infrastructure projects.
“The city is growing. There’s more complex accounting issues going on, more capital projects, more grant activity,” Brooks said.
According to the report, major capital investments included ongoing County Line Road upgrades, the new downtown Elgin Police Department headquarters, parks improvements and more.
The city’s capital assets grew by $23.5 million, while long-term liabilities decreased by nearly $3.5 million, reflecting lower debt and pension obligations, BrooksWatson reported. Revenues reached $18.8 million, driven by property and sales tax growth of 13% and 10%, respectively.
Brooks told council members the fund shortfall was expected given the city’s volume of active projects. He said the city’s pooled cash account — used for general operations — had drawn from the capital-projects fund, creating a deficit in the account that should have remained restricted for capital expenses.
“The city did have a capital-project improvement plan — which had several projects and certain amounts of funding allocated to those projects — but at some point during the year, the city overspent that available funding,” he said.
TRACKING FINANCES
According to the firm, staffing gaps contributed to some of the city’s accounting issues.
“As the city expands you should always consider the need for increasing your staff in the accountant role,” Brooks said.
The city has been without a permanent finance director for more than a year.
“The vacancy within the position caused a lot of these issues,” Brooks said. “Just addressing the growth of the city and filling that role would be important.”
The audit further showed compliance issues with the Public Funds Investment Act, which Brooks attributed to turnover in the finance department.
Despite those findings, the report reaff irmed the city’s financial statements were “accurate and free of misuse.”
LOOKING FORWARD
Eads said the city has addressed internal control issues but continues to face staffing shortages that affect financial reporting.
“We know our current issues … we understand what needs to happen” he said. “As far as the greater pieces and the questions — I cannot address that. We need in-house experts.”
City officials issued a public statement Oct. 27 in response to lingering confusion and community concerns with Elgin’s financial history. The release urged residents to rely on verified information.
“We recommend that the public get acquainted with the facts prior to posting or reposting information on social media,” the statement read. “There have been no issues reported regarding the city’s current finances. The city continues to build its reserves, and any issues discovered in the audit concerning accounting procedures are being addressed with current staff.”
BrooksWatson’s full audit report is available at elgintexas.gov.
