Contributor:
Mike Brotherton, Senior Manager, Government & Public Sector Advisory
A Texas municipality reached out to Cherry Bekaert for financial reporting support, a collaboration that led to catching up on two overdue audits and a regained bond rating.
Client Overview
The client is a Texas municipality with a rich history, cultural vibrancy and economic significance. Serving over 114,000 residents, the municipality has assets exceeding $1.2 billion, an annual budget with over $300 million in operating expenditures, and a certified taxable property valuation of approximately $13 billion.
Audit Delays and Rapid Talent Turnover
When the municipality reached out to Cherry Bekaert, it was facing a financial reporting crisis. The city was two years behind on its annual audits, and its bond rating had recently been withdrawn. Much of the finance department, including the entire finance management team, had turned over within a six-month period. Additionally, bank reconciliations went unperformed for years, and a persistent cash variance had effectively stalled the completion of the fiscal year 2024 audit.
With Texas law requiring municipalities to file audited financial statements within 180 days of fiscal year-end, and Senate Bill 1851 now tying audit compliance directly to a municipality’s ability to set its property tax rate, the stakes could not have been higher. The municipality was facing a daunting deadline: completing the fiscal year 2024 and fiscal year 2025 audits within a five-month window.
Our Swift Response and Structured Approach
“Cherry Bekaert responded promptly to my initial request for assistance, and within two weeks we had an engagement in place with their team actively supporting our audit,” said the interim CFO of the Texas municipality.
Our team was quickly on the ground at a city hall meeting with staff to assess current processes, identify gaps and establish a clear path forward. The immediate priority was the unresolved fiscal year 2024 cash variance that caused the audit to be placed on hold.
Drawing on extensive experience with surge team engagements, Cherry Bekaert was able to immediately deploy resources to begin assisting the municipality.
Clear timelines and responsibilities were established. Our team delivered weekly status meetings with both the municipality and its auditors, provided project management assistance, assigned tasks between parties, and tracked progress to keep every stakeholder on schedule. These consistent meetings paired with a defined, structured approach, were critical in meeting the required deadlines. The engagement team flexed between two and six Cherry Bekaert professionals at a time, scaling up or down based on the municipality’s immediate needs throughout the fiscal year 2024 and fiscal year 2025 audits.
Comprehensive Accounting and Audit Support
By applying a disciplined, methodical approach to the reconciliations, the Cherry Bekaert team identified and resolved the cash variance where prior efforts had fallen short. With that critical roadblock cleared, focus shifted to the remaining open items necessary to complete the fiscal year 2024 audit. Our professionals supported the municipality across:
- Receivables and revenues
- Capital assets and long-term liabilities (GASB 34; GASB 87 – Leases; GASB 96 – Subscription-based IT Arrangements)
- Payroll, pensions (GASB 68), OPEB (GASB 75) and compensated absences (GASB 101)
- Interfund activities, fund balance (GASB 54) and net position reconciliations
- Grant activity reconciliations and preparation of the SEFA/SESA
- Responding to auditor inquiries and adjustments as identified
Once the fiscal year 2024 cleanup was substantially complete, the team transitioned into fiscal year 2025 support without missing a beat. Cherry Bekaert’s ability to scale up with resources proved crucial, as fiscal year 2025 presented many of the same challenges, including not preparing a single bank reconciliation during the fiscal year.
“The client is a Texas municipality with a rich history, cultural vibrancy and economic significance. Serving over 114,000 residents, the municipality has assets exceeding $1.2 billion, an annual budget with over $300 million in operating expenditures, and a certified taxable property valuation of approximately $13 billion.”
–Interim CFO, Texas Municipality
Restored Financial Credibility and Confidence
Through the combined efforts of Cherry Bekaert, the municipality’s finance team, and the external auditors, the fiscal year 2025 audit was completed and filed by the March 2026 statutory deadline. “With their assistance, we were able to complete two audits within a three-month period — our first time achieving on-time audits since 2018,” said the interim CFO.
The impact extends beyond compliance. Completing the audit on schedule helped restore the municipality’s financial credibility and positioned it to operate with greater fiscal confidence. Two months after the completion of the fiscal year 2025 audit, the municipality’s bond rating was restored.
“Their recommendations were accepted by our external auditor without hesitation, further underscoring their expertise in governmental accounting. In addition to their technical knowledge, their responsiveness was exceptional — whether by phone, text, or video, they were consistently available, even outside of normal business hours.”
–Interim CFO, Texas Municipality
Looking ahead, Cherry Bekaert continues to support the municipality with the implementation of new policies and procedures, ongoing bank reconciliation assistance, and additional financial cleanup. The goal has evolved beyond resolving past deficiencies to building the sustainable processes and internal capacity the municipality needs to maintain audit readiness year after year.
Why Governments Choose Cherry Bekaert
The Cherry Bekaert Government & Public Sector advisory team is a national practice working year-round, exclusively with state and local governments to offer deep accounting experience and operational knowledge. Our dedicated governmental surge team enables us to quickly scale resources, coordinate across multiple entities and systems, and meet tight deadlines without sacrificing quality.
Our services are designed for governments that:
- Recently struggled to get an audit issued on time
- Are one or more years behind on audit issuance
- Do not have a timely year-end close or a high-functioning close process
- Have repeated or unresolved audit findings
- Experienced recent turnover or vacancies in the finance department
- Are implementing new Governmental Accounting Standards Board (GASB) standards without sufficient staff capacity
- Need support coordinating with external auditors to push audits across the finish line
By focusing on close discipline, GASB execution and auditor coordination, our clients experience:
- Shorter audit timelines
- Lower risk of audit findings
- Reduced staff overtime and burnout
- Lower risk of statutory or reputational consequences
- A clearer path to staying on schedule going forward
“Working with the Cherry Bekaert team felt seamless from the start. They quickly integrated with our staff, creating a cohesive and efficient working relationship. This level of collaboration reflects not only their professionalism and technical strength, but also their ability to understand and navigate challenging situations alongside their clients.”
–Interim CFO, Texas Municipality
Our Services
- Audit Preparation and Year-end Close
- Finance Modernization
- New GASB Implementation
- Ongoing GASB Support
Connect With Us
