By Geena Monahan—For the North Star Reporter
Despite rising long-term obligations and the financial demands of major capital projects, the town is in a position to manage future fiscal challenges, according to an independent auditor.
During a May 26 meeting of the Audit Subcommittee, auditor Zach Fentross of CliftonLarsonAllen LLP presented the town’s fiscal year 2025 audit, which resulted in an unmodified opinion and included four management letter recommendations, down from six the previous year.
“I think the takeaway is the town is in a good financial position,” Fentross told committee members.
Fentross reported that auditors encountered no difficulties reviewing the town’s financial statements and had no disagreements with management.
The audit highlighted continued investment in town facilities and infrastructure, with North Attleborough’s capital assets increasing by approximately $9.9 million during FY25. Major projects included $3 million in repairs to the Amvet Boulevard School roof, $2.2 million in library renovations and $1.3 million in road improvements.
The town also maintained a healthy financial cushion. North Attleborough’s unassigned fund balance — a key measure of available reserves — stood at approximately $15.45 million as of June 30, 2025. Fentross said the figure reflects a strong financial position and provides flexibility during the budgeting process.
“By no means is this a bad financial position for the town of North Attleborough,” he said. “It’s actually a good financial position.”
The town also outperformed budget expectations during FY25. Revenues came in approximately $3.4 million above projections, while expenditures were about $1.87 million below budget, creating a combined positive variance of roughly $5.29 million.
Long-term obligations a focus
While the town’s overall financial position remains strong, Fentross noted several long-term liabilities that continue to require attention.
North Attleborough’s net pension liability declined by approximately $4.6 million to $35.55 million during FY25, largely due to stronger-than-expected investment returns. The retirement system is currently 78.7% funded.
At the same time, the town’s net liability for other post-employment benefits, or OPEB — primarily retiree health insurance obligations — increased by approximately $9.3 million to $131.15 million. Fentross said much of that increase resulted from changes in actuarial assumptions, particularly a lower discount rate used to calculate future costs.
The town’s total projected OPEB obligation is approximately $141 million, though officials have begun setting aside funds to offset those future expenses. North Attleborough contributed $1.5 million to its OPEB trust during FY25, bringing the trust balance to about $11 million.
“The town has already started putting money aside and you are making contributions to your OPEB trust to begin funding this,” Fentross said.
The audit also showed a roughly $1.9 million increase in the town’s liability for unused sick and vacation time. Fentross said the increase largely stemmed from a new accounting standard requiring municipalities to more broadly estimate future payouts rather than a sudden increase in employee benefits.
Town Councilor Mark Gould noted that retirement payouts can create budgeting challenges if communities are not prepared, Town Manager Michael Borg assured the committee that North Attleborough’s collective bargaining agreements place limits on sick-time buyouts and said no employee would be eligible for the type of six-figure payout discussed by Gould.
Recommendations continue to decline
The town received four management letter recommendations this year, two of which were informational and intended to ensure accounting practices remain aligned with current standards.
One recommendation called for improvements to the town’s general ledger structure, including greater automation of accounting functions that are currently tracked manually.
Another involved federal grants administered by the School Department. Auditors found expenditures tied to several grants that appeared to fall outside their allowable spending periods and repeated a prior recommendation that reimbursement requests be submitted only after related expenses have been incurred.
Borg said school officials have already met with auditors and understand the corrective actions needed.
Gould asked whether municipalities should avoid relying on one-time revenues to support recurring expenses. Fentross said bond rating agencies generally prefer to see one-time funds used for capital projects, rather than ongoing operating expenses such as salaries.
Borg said North Attleborough follows that approach, directing much of its free cash toward capital stabilization and capital projects.
“Our bond rating remains AA+ with a stable outlook,” Borg said.
Fentross praised Town Accountant Stacy Blaisdell and her staff for their preparation throughout the audit process.
“The town was very well prepared for us,” he said. “It is uncommon for someone with little municipal experience to come in and be successful in an audit, and Stacy did that.”