Title
Consider approving Resolution No. 2026-046 accepting the Annual Comprehensive Financial Report (ACFR) for the fiscal year ended September 30, 2025, as submitted by Forvis Mazars, LLP; and take appropriate action.
Body
BACKGROUND:
The Annual Comprehensive Financial Report (ACFR) is the City’s official annual financial report that provides a detailed overview of the City’s financial condition, operating results, and fund balances for the fiscal year. The report is prepared in accordance with standards established by the Governmental Accounting Standards Board and includes audited financial statements reviewed by an independent accounting firm. The ACFR promotes financial transparency and provides important financial information to the City Council, residents, and other stakeholders.
Section 2.18 of the City Charter states the below:
• Sec. 2.18. - Independent annual audit.
Prior to the end of each fiscal year as defined in section 4.01 of this Charter, the Council shall designate certified public accountants who, as of the end of the fiscal year, shall make an independent audit of accounts and other evidences of financial transactions of the City government and shall submit their report to the Council and to the City Manager. Such accountants shall have no personal interest, direct or indirect, in the fiscal affairs of the City government or of any of its officers. They shall not maintain any accounts or records of the city business, but, within specifications approved by the Council, shall postaudit the books and documents kept by the Department of Finance and any separate subordinate accounts kept by any other office, department or agency of the City Government. A copy of such audit shall be kept in the Office of the City Secretary subject to inspection by any citizen and officer during regular office hours.
Forvis Mazars, LLP has completed its independent audit of the financial statements of the City of Farmers Branch for the fiscal year ended September 30, 2025. The audit included review of the City’s governmental activities, business-type activities, each major fund, and the aggregate remaining fund information, as well as the related notes that collectively comprise the City’s basic financial statements.
DISCUSSION:
The ACFR is required to be approved by the City Council on or before March 31, 2026. The independent auditors are finalizing the report and will have it available on March 18, 2026. Attached is the draft ACFR, which is subject to change.
THE AUDIT SHOWS A CLEAN AND UNMODIFIED AUDIT: A clean and unmodified audit for a Texas city means independent auditors found that the city's financial statements are presented fairly, in all material respects, and follow GAAP (Generally Accepted Accounting Principles). It indicates no material weaknesses or significant deficiencies in internal controls, no non-compliance with laws, and accurate financial reporting.
The final ACFR will be available at the Farmers Branch Manske Library and on the City’s website.
The related Continuing Disclosures, which are ongoing financial and operating updates that city governments must provide after issuing municipal bonds, will be submitted through the City’s Financial Advisor, Hilltop Securities, Inc., as required by U.S. Securities and Exchange Commission (SEC) Rule 15c2-12, directly to the Trinity River Authority (TRA).
FISCAL IMPACT:
Budgeted amount of $124,150 for independent audit services, approved in the Fiscal Year 2025-26 operating budget.
It is important to note that audit services will go out for bid this year.
DISTRICT:
Citywide
POSSIBLE COUNCIL ACTION:
1. I move to approve Resolution No. 2026-046 as presented.
2. I move to approve Resolution No. 2026-046, with modifications.
3. I move to table the issue for further study or take no action.
ATTACHMENTS:
1. Resolution No. 2026-046
2. Draft Annual Comprehensive Financial Report
3. Forvis Mazars, LLP City Council presentation