Town of Bermuda Run Bermuda Run, North Carolina For the year ended June 30, 2023  Independent Auditor's Reports Basic Financial Statements Information Accompanying the Basic Financial Statements  And    Town of Bermuda Run Table of Contents June 30, 2023  Independent. Auditor's Report Management's Discussion and Analysis Basic Financial Statements:  1-3 4-13  Government-wide Financial Statements:  Exhibit 1 Exhibit 2 Fund Financial Statements Exhibit3 Exhibit4 4 Exhibit5 5  Statement of Net Position Statement of Activities  14 15  Balance Sheet- = Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances - Govemmental Funds Reconciliation of the Statement of Revenues, Expenditures And Changes in Fund Balances of Govemmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances General Fund and Annually Budgeted Statement of Fund Net Position - Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund Statement of Cashl Flows - Proprietary Funds  16 17  tot the Statement of Activities Special Revenue Fund  18  Exhibit 6  19 20 21 22 23-40  Exhibit7 Exhibit 8 Exhibit9  Notes to the Financial Statements    Required Supplementary Information:  Schedule of the Proportionate Share of the Net Pension Asset-Local Government Employees' Retirement System Schedule of Contributions- - Local Govemment Employees'  41 42  Retirement System  Individual Funds Statements and Schedules:  Statement of Revenues, Expenditures, and Changes in Fund Balances- Statement of Revenues, Expenditures, and Changes in Fund Balances- - Budget and Actual - Special Revenue Fund - Gated Security Statement of Revenues, Expenditures, and Changes in Fund Balances- - Budget and Actual - General Capital Projects Fund - Blue Heron Trail Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual - Special Revenue Fund - American Rescue Plan Schedule of Revenues and Expenditures Budget and Actual - (Non-GAAP) Schedule of Revenues and Expenditures-Budget: and Actual-(Non-GAAP)  Budget and Actual - General Fund  43-44 45 46 47 48-49 50  Sewer Fund  Sewer Capital Projects Fund- -WWTP  Other Schedules:  Schedule of Changes in Ad' Valorem Taxes Receivable  51 52  Analysis of Current Tax Levy  Compliance Section:  Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; With OMB Uniform Guidance and the State Single Audit  with Govemment, Auditing Standards  53-54  Implementation Act  55-56 57-59 60  Schedule of Findings and Questioned Costs Schedule of Federal and State Financial Assistance    EDDIE CARRICK, CPA, PC Certified Public Accountant  Independent Auditor's Report  Tot the Honorable Mayor and Town Council Town of Bermuda Run, North Carolina Report on the Audit of Financial Statements  Opinions  We have audited the financial statements of the governmental activities, business-type activities, the aggregately discretely presented component unit, each major fund, and the aggregate remaining fund information of Town of Bermuda Run, North Carolina as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise Town of Bermuda Run's basic financial statements as listed in the table of In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of Town of Bermuda Run, North Carolina as of June 30, 2023, and the respective changes in financial position and the respective budgetary comparison for the General Fund, for the year then ended ina accordance with accounting principles generally accepted in the United States of America. We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Govemment. Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Town of Bermuda Run, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide al basis for our audit opinions. The financial statements of the Bermuda Run TDA were not Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free Inp preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raises substantial doubt about the Town of Bermuda Run's ability to continue as a going concern for the twelve months beyond the financial statement date, including any currently known information  contents.  Basis for Opinions  audited in accordance with the Govemmental Auditing Standards. Responsibility of Management's for the Audit oft the Financial Statements  from material misstatement, whether due to fraud or error.  that may raise substantial doubt shortly thereafter.  Auditor's Responsibility for the Audit of the Financial Statements  Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance buti is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Govemmental Auditing Standards will always detect material statement when ite exists. The risk ofr not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofi internal control. Misstatements are considered material ift there is a substantial likelihood that, individually ori in the aggregate, they wouldi influence thej judgment made by ar reasonable user based ont the financial statements.  Member oft the American. Institute ofCertified/ Public Accountants  1  151 Young Drive, Lexington, NC27292 336-249-2545, Fax 336-249-4745    Inp performing an audit in accordance with GAAS, and Govemmental Auditing Standards, we  Exercised professional judgement and maintained professional skepticism throughout the audit. identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsible to those risks. Such procedures include examining, on ai test basis, evidence regarding the amounts and disclosures ini the financial statements. obtain an understanding ofi internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town of Bermuda Run'si internal control. Accordingly, no such opinion is expressed. evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town of Bermuda Run's ability to continue as a going concern for a reasonable We are required to communicate with those charged with governance regarding among other matters, the planned scope and timing oft the audit, significant audit findings, and certain internal control-related matters that we identified  period of time.  during the audit.  Required Supplementary Information  Accounting principles generally accepted in the United States of America require that Management's Discussion and Analysis on pages 4 through 13, the budgetary comparison information on page 19, and the Local Government Employees' Retirement System's Schedules of the Proportionate Share of the Net Pension Asset (Liability) and Contributions, on pages 41 through 42, respectively, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing thel basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted int the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic We do not express an opinion or provide any assurance on the information because the limited procedures do not Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town of Bermuda Run's basic financial statements. The individual fund financial statements, budgetary schedules, and other schedules as well as the accompanying schedule of expenditures of expenditures off federal and state awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the State Single Audit Implementation Act are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly tot the underlying accounting and other records used to prepare the basic financial statements. This information has been subjected to the auditing procedures applied ini the audit oft the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the individual fund financial statements, budgetary schedules, and other schedules are fairly stated, in all  financial statements.  provide me with sufficient evidence to express an opinion or provide any assurance.  Supplementary Information  material respects, in relation toi the basic financial statements as av whole.  2    Other Reporting Required by Government. Auditing Standards  In accordance with Govemment Auditing Standards, we have also issued our report dated October 5, 2023 on our consideration of the Town of Bermuda Run's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Town of Bermuda Run's internal control over financial reporting or on compliance. That report is an integral part of an audit performed ina accordance with Govemment Auditing Standards in considering Town of Bermuda Run's internal control over  financial reporting and compliance. Eddie Carrick CPA, PC  Cce.cf Lexington, North Carolina October5,2023  3    *  TOwN OF  Bermuda RRa NORTH CAROLINA I20 Kinderton Boulevard, Suite IOO Bermuda Run, NC: 27006 336.998.0906 Fax 336.998.7209 townofbr.com  Management's Discussion and Analysis  Asr management of the Town of Bermuda Run, we offer the readers oft the Town of Bermuda Run's financial statements this narrative overview and analysis of the financial activities of the Town of Bermuda Run for the fiscal year ended June 30, 2023. We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the Town's financial statements, which  follow this narrative. Financial highlights  The assets and deferred outflows of resources of the Town of Bermudal Run exceeded its liabilities and deferred inflows of resources at the close of thet fiscal year by $17,081,849 (net position). The government's total net position increased by $4,995,431, primarily due to grants and a As of the close of the current fiscal year, the Town of Bermuda Run's governmental funds reported combined ending fund balances of $2,385,417 with a net increase of $492,533 in fund balance. At the end oft the current fiscal year, unassigned fund balance for the general fund was $1,353,743, or The Town of Bermuda Run's total debti increased by $102,316 due to a decrease in accrued vacation of  conservative approach to spending.  Approximately 43% oft this total amount, or $1,031,673, is restricted or assigned.  71% oft total general fund expenditures for thet fiscaly year. $3,263, and an increase in net pension liability of $105,779.  Overview oft the Financial Statements  This discussion and analysis is intended to serve as introduction to the Town of Bermuda Run's basic financial statements. The Town's basic financial statements consist of three components: 1) govemment- wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (see Figure 1). The basic financial statements present two different views oft the Town through the use of goverment- wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the reader's understanding of the financial  condition oft the Town of Bermuda Run.  4  A Vibrant Community of Vision    Management Discussion and Analysis Town of Bermudal Run Figure1  Required Components of Annual Financial Report  Managements Discussion and Analysis  Basic Financial Statements  Government-wide Financial Statements  Fund Financial Statements  Notes to the Financial Statements Detail  Summary  Basic Financial Statements  The first two statements (Exhibits 1 and 2) in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the Town's financial status. Ther next statements (Exhibit 31 through 9) are Fund Financial Statements. These statements focus on the activities of the individual parts oft the Town's government. These statements provide more detail than the goverment-wide statements. There are three parts to the Fund Financial Statements: 1) the governmental fund statements 2) the budgetary comparison statements and 3) the proprietary fund statements. The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the Town's individual funds. Budgetary information required  byt the General Statutes also can be found in this part of the statements.  5    Management Discussion and Analysis Town of Bermuda Run Government-Wide Financial Statements  The govemment-wide financial statements are designed to provide the reader with al broad overview of the Town's finances, similar in format to a financial statement of a private-sector business. The goverment- wide statements provide short and long-term information about the Town's financial status as awhole. The two government-wide statements report the Town's net position and how they have changed. Net position is the difference between the Town's total assets and deferred outflows of resources and total liabilities and deferred inflows of resources. Measuring net position is one way to gauge the Town's The government-wide statements are divided into three categories: 1) govemmental activities 2) business- type activities and 3) component units. The governmental activities include most of the Town's basic services such as safety and security, transportation and administration. Property tax and state shared revenues finance these activities. The business-type activities are those that the Town charges customers top provide. These include sewer services offered by the Town. The final category is component unit. Although legally separate from the Town, the Tourism Development. Authority is important to the Town. The  financial condition.  Town exercises control over the Authority by appointing its members. The government-wide financial statements are on Exhibits 1 and 2 oft this report.  Fund Financial Statements  The fund financial statements (see Figure 1) provide a more detailed look at the Town's most significant activities. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town of Bermuda Run, like all other governmental entities in North Carolina, uses fund accounting to ensure and reflect compliance (or non-compliance) with finance-related legal requirements, such as General Statutes or the Town's budget ordinance. All of the funds of the Town of Bermuda Run can be divided into two categories: govemmental funds and proprietary Governmental Funds Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the Town's basic services are accounted fori in govemnmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will be available for spending in the next year. Government funds are reported using an accounting method called modified accrual accounting which provides a short term spending focus. As a result, the governmental fund financial statements give the reader a detailed short-term view that helps him determine if there are more or less financial resources available to finance the Town's programs. The relationship between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and govemnmental funds is described in a  funds.  reconciliation that is part of the fund financial statements.  6    Management Discussion and Analysis Town of Bermuda Run  The Town of Bermuda Run adopts an annual budget for the General Fund and Special Revenue Fund, as required by the General Statutes. The budget is al legally adopted document that incorporates input from the citizens oft the Town, the management of the Town, and the decisions of thel board about which services top provide and how to pay for them. It also authorizes the Town to obtain funds from identified sources to finance the current period activities. The budgetary statement provided for the General Fund and Special Revenue Fund demonstrates how well the Town complied with the budget ordinance and whether or not the Town succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented in the same format, language and classifications as the legal budget document. The statement shows four columns: 1) the original budget as adopted by the board 2) the final budget as amended by the board 3) the actual resources, charges to appropriations, and ending balances in the General Fund and Special Revenue Fund, and 4) the differences or variance between the final budget and actual resources and charges. To account fort the difference between the budgetary basis of accounting and the modified accrual basis, a reconciliation showing the differences ini the reported activities is shown at the end oft thel budgetary statement. Proprietary funds - The Town of Bermuda Run has one type of proprietary fund. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town uses an enterprise fund to account fori its sewer activity. This fund is the same as the functions shown in the business-type activities in the Statement of Net Position and Statement of Notes to the Financial Statements - The notes provide additional information that is essential to the full understanding of data provided in the govemment-wide and fund financial statements. The notes to the Other Information - In addition to the basic financial statements and accompanying notes, this report includes certain supplemental information detailing thei information provided in the basic financial statements and is presented to allow the reader to gain an in-depth understanding of the financial information Interdependence with Other Entities - The Town depends on financial resources flowing from, or associated with, both the Federal Govemment and the State of North Carolina. Because of this dependency, the Town is subject to changes in specific flows of intergovemmental revenues based on modifications to Federal and State laws and Federal and State appropriations. Iti is also subject to changes ini investment earnings and asset values associated with U.S. Treasury Securities because of actions by  Activities.  financial statements begin on page 23 oft this report.  presented.  foreigngoverment and other holders of publicly held U.S. Treasury Securities.  7    Management Discussion and Analysis Town of Bermuda Run Government-Wide Financial Statements  Town of Bermuda Run's Net Position (Figure2)  Governemental Activities 2023  Business-Type Activities 2023  Total 2023 2022  2022  2022  Current and other assets Capital assets Deferred outflows ofr resources Totala assets and deferred outflows ofr resources Long-term liabilities Otherl liabilities Deferredi infiows of resources Totall liabilities and deferred inflows ofr resources Net position: Net investment in capital assets Restricted for: Stabilization by State Statute Streets Capital project Unrestricted Totalr net position  2,466,852 $ 2,635,040 $ 2,796,125 $ 2,367,837 $ 5,262,977 $ 5,002,877 8,430,631 5,894,186 3,501,255 1,977,625 11,931,886 7,871,811 10,995,776 8,591,277 6,297,380 $4,345,461 17,293,156 12,936,738  98,293  62,051  98,293  62,051  151,198 48,882 54,035 298,550 6,073 498,710 211,306 846,142  151,198 54,035 6,073 211,306  48,882 302,730 498,710 850,322  4,180 4,180  8,430,631 5,894,186 3,501,255 1,977,625 11,931,886 7,871,811  440,963 410,135 59,749 1,442,992  555,256 328,965  440,963 410,135 59,749  555,256 328,965  966,728 2,796,125 2,363,657 4,239,117 3,330,385  $10,784,469 $ 7,745,135 $6 6,297,380 $ 4,341,282 $ 17,081,849 $ 12,086,417  As noted earlier, net position may serve over time as one useful indicator of a govemnment's financial condition. The assets and deferred outflows of resources of the Town exceeded liabilities and deferred inflows by $17,081,849 as of June 30, 2023. The Town's net position increased by $4,995,431 for the fiscal year ended June 30, 2023. However, thel largest portion (70%) reflects the Town's net investment in capital assets (road improvements, equipment, machinery, utility plant) less any related debt still outstanding that was issued to acquire those items. The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town's net investment in capital assets is reported net of the outstanding debt, the resources needed to repay that debt must be provided by other sources, since capital assets cannot be used to liquidate these liabilities. An additional portion of the Town's net position, $910,847, represents resources that are subject to external restrictions  ont how they may! be used. The remaining balance of $4,239,117 is unrestricted.  8    Management Discussion and Analysis Town of Bermudal Run govemment net position:  Several particular aspects of the Town's financial operations positively influenced the total unrestricted  Operating and capital grants  Timely maintenance of Town assets to maximize lives. Conservative spending approach by management  Town of Bermudal Run's Changes in Net Position (Figure: 3)  Govemmental Activities 2023 2022  Business-type Activities 2023 2022  Total 2023 2022  Revenues Program revenues: Charges fors services Operating grants and contributions Capital grants and contributions General revenues: Propertyt taxes Othert taxes Other Total revenues Expenses: General government Safety Gate operations Transportation Interest onl long-term debt Sewer Total expenses Transfers Increase in net position Net position, July1 Netp position, June 30  659,362 $ 571,768 $ 670,501 $ 609,975 $ 1,329,863 $ 1,181,743  3,460,014 575,525 1,006,020 963,020 452,956 429,253 391,050 549,944 1,366,217 2,061,684 70,664 669,967 684,550 823,223 403,106  3,460,014 1,800,000 1,006,020 452,956 391,050  575,525 963,020 429,253 549,944  1,800,000  5,969,402 3,089,510 2,470,501 609,975 8,439,903 3,699,485  1,366,217 2,061,684 70,664 669,967 823,223 514,402  87,022  87,022 684,550 403,106 334,786 128,338 128,338  514,402 334,786  2,930,071 3,236,362 514,402 334,786 3,444,473 3,571,148 3,039,333 (146,851) 1,956,099 275,189 4,995,433 3,039,333 (146,851) 1,956,099 275,189 4,995,431 7,745,135 7,891,985 4,341,282 4,066,093 12,086,417 11,958,078 $10,784,469 $7,745,135 $ 6,297,380 $4,341,282 $ 17,081,849 $12,086,417  Increasei inr net position before transfers  9    Management Discussion and Analysis Town of Bermuda Run  Governmental activities. Governmental activities increased the Town's net position by $3,039,333, thereby accounting for 61% of the total increase in net position of the Town. The increase in net position was the result of operating and capital grants as well as continued effort to control costs and manage expenditures. Management believes healthy investment in the Town will result in additional revenues, adding to the Town's net position by investing in capital assets which were largely funded by capital contribution revenues. Tax revenue remained steady in the current year. Town management acknowledges that 2023 was as successful year and plans on improving upon these approaches as a long-  term strategy to realize continued fiscal health. Key elements of this increase are as follows: Tax revenues remained steady Capital project and special projects grants  Town council has adopted a conservative approach to general fund spending  Business-type activities: Business-type activities increased the Town's net position by $1,956,099, accounting for 39% of thet total growth in the governments net position. Key elements of this increase areas  follows:  Sewer charges increased Capital grants Conservative approach tos spending Financial Analysis oft the Town's Funds related legal requirements.  As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance- Governmental Funds: The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the Town's financing requirements. Specifically, unreserved fund balance can be a useful measure of a government's The General Fund is the chief operating fund of the Town. Att the end of the current fiscal year, the Town of Bermuda Run's fund balance available in the General Fund was $1,353,743, while total fund balance reached $2,204,841. The Town currently has an available fund balance of 71% of general fund At June 30, 2023, the governmental funds of the Town reported a combined fund balance of $2,385,417 with a net increase in fund balance of $492,533. Included in this change in fund balance are increases in the General Fund of $318,364, a decrease in Special Revenue Fund-Gate of $850, an increase in the General Fund Capital Project-Blue Heron of $175,336, and a decrease in Special Revenue Fund-ARPA of  net resources available for spending at the end of thet fiscal year.  expenditures, while total fund balance represents 115% of the same amount.  $317.  10    Management Discussion and Analysis Town of Bermudal Run  General Fund Budgetary Highlights: During the fiscal year, the Town revised the budget on several occasions. Generally, budget amendments falli into one of three categories: 1) amendments made to adjust the estimates that are used to prepare the original budget ordinance once exact information is available; 2) amendments made to recognize new funding amounts from external sources, such as Federal and State grants; and 3) increases in appropriations that become necessary to maintain services. The Town amended the budget in order to account for the various operating expenditures as well as other Proprietary Funds: The Town's proprietary funds provide the same type of information as found in the government-wide statements but in more detail. Unrestricted net position in the Sewer Fund at the end of the fiscal year amounted to $2,796,125. The total change in net position was $1,956,099. Other factors conceming the finances of this fund have already been addressed int the discussion oft the Town's business-  special and capital projects.  type activities.  Capital Asset and Debt Administration  Capital Assets. The Town's investment in capital assets fori its governmental and business-type activities as of. June 30, 2023, totals $11,931,886 (net of accumulated depreciation). These assets include buildings,  roads, machinery and equipment, and construction inj progress.  Major capital asset transactions during they year included the following additions: Construction in progress - Blue Heron Trail $2,881,220 Sewer' WWTP construction in progress -$ $1,608,024  Town of Bermudal Run's Capital Assets (net of depreciation) (Figure4)  Govemmental Activities 2023 2022  Business-type Activities 2023 2022  Total 2023 2022  Construction inp progress $3,459,150 $ 577,930 $ 1,808,656 $ 200,632 $ 5,267,806 $ 778,562  Roadi improvements Buildings Otheri improvements Equipment andf furnishings Plant and distribution  4,391,039 4,620,439 321,300 357,000 231,378 297,082 27,764  4,391,039 4,620,439 321,300 357,000 231,378 297,082 27,764 1,692,599 1,776,994  41,733  41,733  1,692,599 1,776,994  $8,430,631 $ 5,894,186 $ 3,501,255 $ 1,977,625 $ 11,931,886 $7,871,810  Additional information on the Town's capital assets can be found in the Note ILA.4 of the Basic Financial  Statements.  11    Management Discussion and Analysis Town of Bermudal Run  Long-term Debt. As of. June 30, 2023, the Town's long-ter debt was made up of thet following:  Town of Bermuda Run's! Long-term Debt (Figure 5)  Govemmental Activities 2023 2022 5,085 8,548 151,198 $ 48,882 $  Business-type Activities 2023 2022 $ $  Total 2023 2022 $1 146,113 $ 40,334 5,085 8,548 $ 151,198 $ 48,882  Pension related debt (LGERS) $ 146,113 $ 40,334 $  Compensated absences  Town of Bermuda Run's Outstanding Debt  The Town of Bermuda Run's total debt increased by $102,316 due to a decrease in accrued vacation of North Carolina general statutes limit the amount of general obligation debt that a unit of government can issue to 8 percent of the total assessed value of property located within that government's boundaries. The Additional information regarding the Town's long-term debt can bet found in Note II.B.6 oft this report.  $3,263, and an increase in net pension liability of $105,779.  legal debt margin for the Town is $53,133,013.  Economic Factors and Next Year's Budgets and Rates  Thet following key economic indicators reflect the growth and prosperity oft the Town. Increased commercial and retail growth in the Town and surrounding areas  Increased destination driven economic impact from Truist Sports Park and RISE indoor sports and events facility for tournaments and special events. These facilities produce over 18,000 room nights for The recent construction of a Chick-Fila restaurant, repurposing an existing vacant building/property Continued increased use of WinMock at Kinderton for corporate events, weddings, and regional programs. WinMock produces between 8,000 and 10,000 room nights for the region. Continued work toward the recruitment ofab boutiquelupscale hotel adjacent to WinMock at Kinderton Ther near completion of the Ariston Place 96-unit market rate apartment community. Two new access streets to the Kinderton Commercial Core area adding additional opportunities for The completed availability of sewer for a 125-acre undeveloped mixed-use zoned area called "Hillsdale  the region  within the Lowes Foods Shopping Center.  mixed-use development  at Bermuda Run" thati is ready for development. Continued infrastructure and utilities upgrades. Continued retail and residential construction and expansions.  The Town continues to take an aggressive approach toward the use of grant funding where available to  supplement revenues.  12    Management Discussion and Analysis Town of Bermudal Run  Budget Highlights fort the Fiscal Year Ending June 30, 2024  Governmental Activities Property tax revenues are expected to increase slightly in conjunction with new construction in the commercial areas, as well as renewed residential family home construction in the residential zoned areas. The Town has budgeted monies to enhance quality of life by interconnecting residential and retail areas with multi-use paths. Other revenues and expenses are expected to remain The Town has chosen not to appropriate fund balance in the fiscal year 2024 budget. Management believes that increased revenues and continued restrictions on spending will maintain the Town's financial position. As the Town considers future revenue sources, it has determined that a $0.01 increase in the property tax rate will result in additional revenues of approximately $65,081 at current values and collection rate. Though management believes current growth will generate enough revenue to support Town operations, a careful analysis ofp property tax revenue will be considered in future years' budgets. Business-type Activities: Revenues for the 2023-2024 year are expected to increase slightly due to projected volume increase in sales tax distribution from the State of North Carolina. However, this will be tempered with a change from per capita to ad valorem method of sales tax distribution by the Davie County  consistent with the 2022-2023 fiscal year.  Commissioners. Requests for Information  This report is designed to provide an overview of the Town's finances for those with an interest in this area. Questions concerning any oft the information found int this report or requests for additional information should be directed tot the Town Manager, Town of Bermuda Run, 120 Kinderton Blvd, Suite 100, Bermuda Run, NC  27006.  13    Exhibit1  Town of Bermuda Run, North Carolina Statement of Net Position June 30, 2023  Component Unit Town of Bermuda Run Tourism Development Authority  Primary Government Business-type Activities  Governmental Activities  Total  ASSETS Currenta assets: Cash andi investments Property taxes receivable (net) Due (to) from otherf funds Grants receivable Accounts receivable (net) Restricted cash Total current assets Non-current: assets: Capital assets (Note 4): Construction in progress Other capital assets, net of depreciation Total Capital assets Total assets DEFERRED OUTFLOWS OF RESOURCES Pension deferrals Total deferredi inflows of resources LIABILITIES Current liabilities: Accounts payable Long-term! liabilities: Net pension liability Accrued vacation Totall liabilities DEFERRED INFLOWS OF RESOURCES Pension deferrals Total deferred inflows ofr resources NETF POSITION Neti investment in capital assets Restricted for: Stabilization by State Statute Streets Capital project Tourism Development Unrestricted Total net position  $ 1,500,956 $ 1,025,818 $ 2,526,773 $  27,399 37,978 490,384 410,135 2,466,852 3,459,151 4,971,480 8,430,631 10,897,483 98,293 98,293  27,399 1,800,000 498,669 410,135 5,262,977 5,267,808 6,664,078 11,931,886 17,194,863 98,293 98,293 54,035 146,113 5,085 205,233 6,073 6,073 11,931,886 440,963 410,135 59,749 4,239,117  (37,978) 1,800,000 8,285 2,796,125 1,808,657 1,692,598 3,501,255 6,297,380  6,827 212,432 219,259  219,259  54,035 146,113 5,085 205,233 6,073 6,073 8,430,631 440,963 410,135 59,749 1,442,992  3,501,255  6,827 212,432 219,259  2,796,125  10,784,469 $ 6,297,380 $ 17,081,849 $  The accompanying notes are ani integral part oft thef financial statements  14        Exhibit3  Town of Bermuda Run, North Carolina Governmental Funds Balance Sheet June 30, 2023  Major Special Capital Revenue Project Gate Blue Heron ARPA 120,826 $  Total Funds $ 1,500,956 410,135 37,978 27,399 490,384 S 2,466,852 $ 54,035 54,035 27,399 27,399 440,963 410,135 59,749 120,826 1,353,743 2,385,417  Special Revenue Governmental  General $1,380,130 410,135 229,004 27,399 239,607 $2,286,275 54,035 $ 54,035 27,399 27,399 440,963 410,135 1,353,743 2,204,841 $2,286,275  ASSETS Casha andi investments Restricted cash Due (to)f from otherf funds Property taxes receivable (net) Accounts receivable (net) LIABILITIES Accounts payable  $  (191,027) 250,777 59,749 $ $  120,826  $  DEFERRED INFLOWS OF RESOURCES Property taxes receivable Total deferred inflows ofr resources Fund balances: Restricted for: Stabilization bys state statute Streets Capital project Assigned for gate operations Unassigned Total Fund Balances Totall liabilities, deferredi inflows of resources andf fund balances Amounts reported for governmental activitiesi in thes statement ofr net position (Exhibit 1)a are different because: Capital assets usedi ing governmental: activities arer notf financial resources: and therefore arer notr reported int thet funds. ofr resources ont the Statement of Net Position Liabilities fore earnedr revenues considered deferred inflows ofr resources inf fund statements. Pension related deferrals Accrued vacation Net position oft the governmental activities  59,749 59,749  120,826 120,826  120,826 $ 59,749 $  8,430,631 (146,113) 98,293 27,399 (6,073) (5,085) $10,784,469  Net pension! liability  Contributions tot the pension plani int the currentf fiscaly yeara are deferred outflows  Somel liabilities, including! bonds payable, are not due and payable int the current period anda are therefore not reported int ther net position oft the governmental: activities:  The accompanying notes are ani integral parto of thet financial statements  16    Exhibit4 4  Town of Bermuda Run, North Carolina Governmental Funds For the Year Ended June 30, 2023  Statement of Revenues, Expenditures and Changes in Fund Balance  Major Special Capital Revenue Project Gate Blue Heron $  Total Governmental Funds $ 990,546 452,956 233,616 3,459,404 17,813 659,362 140,231 5,953,928 1,640,908 7,594,837 4,180,969 70,664 660,211 549,552 5,461,396 1,640,908 7,102,304 492,533 1,892,884 2,385,417  Special Revenue ARPA $  General $ 990,546 $ 452,956 233,616 316,112 17,203 140,231 2,150,665 864,286  Revenues: Ad Valoremt taxes Othert taxes and licenses Unrestricted intergovernmental revenues Restricted intergovernmental revenues Investment earnings Gate fees Other revenues Other financing sources: Proceeds from! long-term debt Transfersi in Capital contributions Appropriated fund balance Expenditures: General government Safety Gate operations Transportation Debts service Other Financing Uses: Transfers out Total Expenditures and Other Uses Excess ofr revenues and other sources over (under) expenditures and other uses Fund Balances Beginning ofy year, July1 End of year, June 30  2,279,933  863,359 610 863,969  659,362 659,362 2,279,933  776,623  Total revenues and other sources 3,014,950  659,362 3,056,556  863,969  1,299,748 70,664 549,552 1,919,964 776,623 2,696,587 318,364 1,886,477 $2,204,841  2,881,220  660,211  660,211 2,881,220  864,286 864,286  660,211 2,881,220  (850) 121,676 120,826  175,336 (115,586) 59,749 $  (317) 317  The accompanying notes are ani integral part oft thet financial statements  17    Exhibit 5  Town of Bermuda Run, North Carolina Governmental Funds For the' Year Ended June 30, 2023  Statement of Revenues, Expenditures and Changes in Fund Balance  Amounts reported for governmental activities in the statement ofa activities are different because:  Neto changesi inf fund balances total governmental funds  $ 492,533  Governmental funds report capital outlays as expenditures. However, int the Statement of Activities, the cost oft those assets is allocated over their estimated usefull lives andr reported as depreciation expense. Thisi ist the amount by which capital outlays exceeded depreciation for the current period.  Capital outlay Construction inj progress Depreciation  $ 2,881,220 (344,775)  2,536,445 15,476 (105,779) 36,242 60,954  Revenues int the statement ofa activities that dor not provide currenti financial resources are not reported as revenues int thet funds. Change inu unavailable revenue fort tax revenues Changes inj pension expense Increase (decrease)i inr netp pension assets (Increase) decrease inr net pension liability Increase (decrease)i inc deferred outfiows (Increase) decrease inc deferred inflows  Thei issuance of long-term debt provides current financial resources to governmental funds, while ther repayment oft the principal ofl long-term debt consumes the current financial resources ofg governmental funds. Neither transaction! has any effect onr netp position. This amount is the net effect oft these differences int thet treatment of long-term debt Some oft the expenses reportedi int the statement ofa activities dor not require the use of currentf financial resources and, therefore, are not reported as  and relatedi items.  expenditures ing governmental funds. Compensated absences Total changes ini net position of govermental activities  3,463 3,039,333  The accompanying notes are ani integral part oft the financial statements  18        Exhibit7  Town of Bermuda Run, North Carolina Proprietary Funds Statement of Fund Net Position June 30, 2023  Assets Current assets: Cash andi investments Grants receivable Sales taxi refund receivable Accounts receivable (net) Total current assets Noncurrent assets: Capital assets: Construction inj progress Other capital assets, neto of depreciation Total non-current: assets Total assets Liabilities Current liabilities: Current maturities on long-term debt Accounts payable Duet to (from) other funds Total currentl liabilities Long-term liabilities: Duei in more than one year Totall liabilities Net Position Neti investment in capital assets Unrestricted  $1,025,818 1,800,000 8,285 2,834,102  1,808,657 1,692,598 3,501,255 6,335,357  37,978 37,978  37,978 3,501,255 2,796,125 $6,297,380  Total netp position oft business-type activities  The accompanying notes are an integral part of thet financial statements  20    Exhibit8 8  Town of Bermuda Run, North Carolina Proprietary Funds For the Year Ended June 30, 2023  Statement of Revenues, Expenses and Changes in Fund Net Position  Operating revenues: Sewer charges Tapi fees Operating expenses: Administration Sewer operations Depreciation  $  670,501 670,501 66,210 363,798 84,394 514,402 156,099  Operating income Nonoperating revenue (expense): Interest income Otheri income Project grants  1,800,000 1,800,000 1,956,099  Total nonoperating revenue (expense) Income before operating transfers Operating transfers in (out)  Change in net position business type activities  1,956,099 4,341,282 $ 6,297,380  Total net position-July1 Total net position- June: 30  The accompanying notes are ani integral part of the financial statements  21    Exhibit 9  Town of Bermuda Run, North Carolina Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2023  Cash flows from operating activities: Cash received from customers Cash payment tos suppliers of goods ands services Cash payment to employees andh benefits Net Cash Provided By Operating Activities Cash flows from noncapital financial activities: Transfer from General Fund Increase ini interfund payable  $ 670,501 (434,188) 236,313  Net Cash Provided by Noncapital Financing Activities Cash from capital and related financing activities:  Grants received Interest paid Payments on long-term debt Increase in construction in progress Cash flows fromi investing activities: Interest oni investments Net Cash Provided by Investing Activities Net Increase (Decrease) In Cash Cash- Beginning of Year, July1 Cash- End of Year, June 30  (1,616,309) (1,616,309)  Net Cash Used by Capital and Related Financing Activities  (1,379,996) 2,405,814 1 1,025,818  Adjustments to Reconcile Net Operating Income to Net Cash Provided by Operating Activities: Changes in current assets andl liabilities: (Increase) decrease in accounts receivable (Increase) decrease in grants receivable Increase (decrease) in accounts payable Net Cash Provided (Used) By Operating Activities  Net operating income Depreciation  1,956,099 84,394 (1,800,000) (4,180) 236,313 $  Interest paid  The accompanying notes are ani integral part oft thei financial statements  22    Town of Bermuda Run, North Carolina NOTES TO FINANCIAL STATEMENTS As ofor for the Year Ended. June 30, 2023  Description oft the unit  The Town of Bermuda Run is located in Davie County, whichi is ini the Piedmont area of North Carolina. The Town has a population of approximately 3,232 and covers approximately two thirds of one square mile. The  Town provides sewer: services toi its residents. LS Summary of Significant Accounting Policies the more significant accounting policies: A. Reporting entity  The accounting policies of the Town of Bermuda Run and its discretely presented component unit conform to generally accepted accounting principles as applicable to governments. The following is a summary of  The Town of Bermuda Run is a municipal corporation governed by an elected mayor and council. As required by generally accepted accounting principles, these financial statements present the Town and its component unit, a legally separate entity for which the Town is financially accountable. The discretely presented component unit presented below is reported in a separate column in the Town's financial  statements in order to emphasize thati iti is legally separate for the Town. Town of Bermuda Run Tourism Development Authority  The Town of Bermuda Run Tourism Development Authority was established December 1, 2010 for the purpose of collecting a 3% occupancy tax to be used for the promotion of tourism in Bermuda Run. The members of the Tourism Development Authority'sg governing board are appointed by the Town. The Tourism Development Authority, which has a June 30 year-end, is presented as ifi it were a special revenue fund. Information conceming the Tourism Development Authority can be obtained by contacting the Finance  Officer, Town of Bermudal Run, Bermuda Run, NC.  B. - Basis ofp presentation  Govemment-wide Statements: The statement of net position and the statement of activities display the information about the govemment and its component unit. These statements include the activities of the overall government. Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the govemnmental and business-type activities of the Town. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non- exchange transactions. Business-type activities are financed in whole or part by fees charged to external The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the Town and for each function of the Town's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees and charges paid by the recipients of goods and services offered by the programs and (b) grants and contributions that are restricted to meeting the operational and capital requirements of a particular program. Revenues that are not classified as program revenues, including allt taxes, are presented as general revenues.  parties.  23    Notes to the Financial Statements (continued)  B. - Basis ofpresentation (continued)  Fund Financial Statements: The fund financial statements provide information about the Town's funds. Separate statements for each fund category - govemmental and proprietary are presented. The Town has no fiduciary funds to report. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining govemmental and enterprise funds Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially the equal values. Non-operating revenues, such as subsidies and  are aggregated and reported as non-major funds.  investment earnings, result from non-exchange transactions or ancillary activities.  The Town reports thet following major governmental funds:  General Fund  The General Fund is the general operating fund of the Town. Itis used to account for all financial resources except those required to be accounted for in other funds. The primary revenue sources are ad valorem taxes and state-shared revenues. The primary expenditures are for streets and general government  services.  Special Revenue Funds  The Special Revenue Funds account for specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specific purposes. The Town maintains two Special Revenue Funds, the Gated Security Fund and the American Rescue Plan Act (ARPA).  Capital Project - Blue Heron Fund  This fund is used to account for the construction of the Blue Heron trail. The Town reports thet following major enterprise funds:  Sewer Fund  The Town maintains an Enterprise Fund, the Sewer Fund, to account for its sewer services. This fund is financed and operated in the same manner as a private business enterprise. A Capital Project Fund has been consolidated into the Sewer Fund for financial reporting purposes. The budgetary comparison for the Itis the intent of the governing body that costs (expenses, including depreciation) of providing these services to the public on a continuing basis be financed or recovered primarily through user charges. Therefore, periodic accounting is necessary for determination ofr net income and rate control.  Sewer Capital Project Fund has been includedi in the supplemental information.  24    Notes to the Financial Statements (continued)  C.M Measurement Focus and Basis of Accounting using ther modified basis of accounting.  Ina accordance with North Carolina General Statutes, all funds oft the Town are maintained during the year Govemment-wide and Proprietary Fund Financial Statements: The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus. The goverment-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses recorded at the time liabilities are incurred regardless of when the related cash flows take place. Non-exchange transactions, in which the Town gives (or receives) value without directly receiving (or giving) equal value in exchange, including property taxes, grants, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in the fiscal year in which all eligibility Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues oft the Town enterprise fund are charges to customers for sales and services. The Town also recognizes as operating revenue the portion oft tap fees intended to recover the cost of connecting new customers to the sewer system. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this Govemnmental Fund Financial Statements: Govermental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long- term debt and acquisitions under capital leases are reported as other financial sources. The Town considers all revenues available if they are collected within 90 days after year end, except for property taxes. Ad valorem taxes receivable are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable for property other than motor vehicles are materially past due and are not considered to be an available resource to finance the operations of the current year. Also, as of September 1, 2013, State law altered the procedures for the assessment and collection of property taxes on registered motor vehicles in North Carolina. Effective with this change in the law, the State of North Carolina is responsible for billing and collecting the property taxes on registered motor vehicles on behalf of all municipalities and special tax districts. Property taxes are due when vehicles are registered. The billed taxes are applicable to the fiscal year in which they are received. Uncollected taxes that were billed in periods prior to September 1, 2013 and for limited registration plates are shown as a receivable in these financial statements and are offset by deferred inflows of resources.  requirements have been satisfied.  as program revenues. Likewise, general revenues include all taxes.  definition are reported as non-operating revenues and expenses.  25    Notes to the Financial Statements (continued)  C.M Measurement Focus and Basis of Accounting (continued)  Sales taxes and certain intergovernmental revenues, such as the beer and wine tax, collected and held by the State at year-end on behalf of the Town are recognized as revenue. Sales taxes are considered shared revenue for the Town because the taxi is levied by Davie County and then remitted to and distributed by the State. Most intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. All taxes, including those dedicated for specific purposes are reported as general revenues rather than program revenues. Under the terms of grant agreements, the Town funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there is both restricted and unrestricted net position available to finance the program. Itis the Town's policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then  general revenues. D.E Budgetary data  The Town's budgets are adopted as required by the North Carolina General Statutes. An annual budget is adopted for the General Fund, the Gated Security Special Revenue Fund and the Enterprise Fund. All annual appropriations lapse at the fiscal-year end. Project ordinances are adopted for the Blue Heron Capital Project Fund, the US 158 Capital project fund, and the Enterprise Sewer Capital Project fund. The enterprise fund projects are consolidated with their respective operating fund for reporting purposes. All budgets are prepared using the modified accrual basis of accounting. Expenditures may not legally exceed appropriations at the departmental level for all annually budgeted funds and at the project level for the multi- year funds. The Town does not have a current policy which allows for departmental transfers without  council approval.  E.Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Fund Equity:  1. Deposits and Investments  All deposits of the Town and the Tourism Development Authority are made in board-designated official depositories and are secured as required by State law (G.S. 159-31). The Town and the Tourism Development Authority may designate, as an official depository, any bank or savings association whose principal office is located in North Carolina. Also, the Town and the Tourism Development Authority may establish time deposit accounts such as NOW and SuperNOW accounts, money market accounts, and State law [G.S. 159-30(c)] authorizes the Town and the Tourism Development Authority to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States, obligations of the State of North Carolina, bonds and notes of any North Carolina local govemment or public authority, obligations of certain non-guaranteed federal agencies, certain high quality issues of commercial paper and bankers' acceptances, and the North Carolina Capital Management Trust (NCCMT). The Town's and the Tourism Development Authority investments are reported at fair value. Non- participating interest eaming contracts are accounted for at cost. The NCCMT Govemment Portfolio, a SEC-registered (2a-7) money market mutual fund, is measured at fair value. Because the NCCMT Government Portfolio has a weighted average maturity of less than 90 days, it is presented as an investment with a maturity of less than 6 months. The Town does not have at formal investment or credit risk  certificates of deposit.  policy.  26    Notes to the Financial Statements (continued)  2. Cash and Cash Equivalents  The Town pools money from several funds to facilitate disbursements and investment and to maximize investment income. Therefore, all cash and investments are essentially demand deposits and are considered cash and cash equivalents. The Tourism Development Authority considers all highly liquid investments (including restricted assets) with a maturity of three months or less when purchased to be cash  and cash equivalents. 3. Restricted, Assets  Powell Bill funds are classified as restricted cash because it can be expended only for the purposes of maintaining, repairing, constructing, reconstructing or widening of local streets per G.S. 136-41.1 through  136-41.4.  Town of Bermuda Run Restricted Cash Governmental Activities General Fund Total Restricted Cash  Streets $410,135  $410,135  4. Ad Valorem Taxes Receivable  Ina accordance with State law (G.S. 105-347 and G.S. 159-13(a)), the Town levies ad valorem taxes on July 1,t the beginning oft the fiscal year. The taxes are due on September 1; however, interest does not accrue until the following January 6. These taxes are based on the assessed values as of. January 1, 2022. As allowed by State law, the Town has established a schedule of discounts that apply to taxes which are paid prior to the due date. In the Town's General Fund, ad valorem tax revenues are reported net of such  discounts.  5. Allowances for Doubtful Accounts  Allr receivables that historically experience uncollectible accounts are shown net of an allowance for doubtful accounts. This account is estimated by analyzing the percentage of receivables that were written offi in prior  years. 6. Capital Assets  Capital assets are defined by the government as assets with an initial, individual cost of more than $2,500 and an estimated useful life ofr more than two years. Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets are recorded at their estimated fair value at the date of donation. General infrastructure assets acquired prior to July 1, 2003, consist of the road network and improvements that were acquired or that received substantial improvements subsequent to July 1, 1980, and are reported at estimated historical cost using deflated replacement cost. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not  capitalized.  27    Notes to the Financial Statements (continued)  6. Capital Assets (continued)  Capital assets are depreciated using the straight-line method over the following estimated useful lives:  Asset Class Road improvements Furniture and office equipment Infrastructure  Useful Life-Yrs 25 10-15 15-40  7. Deferred Outflows/nflows of Resources  Ina addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to ai future period and SO will not be recognized as an expense or expenditure until then. The Town has one that meet this criterion, contributions made to the pension plan in the 2023 fiscal year. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial element, Deferred Inflows of Resources, represents an acquisition of net position that applies to ai future period and sO will not be recognized as revenue until then. The Town has one item that meets the criterion for this category -deferrals of pension expense that result from thei implementation of GASB Statement 68. Int the goverment-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statements of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method that approximates the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance cost, except for prepaid insurance costs, are expensed int the reporting period in which they are incurred. Prepaid insurance costs are expensed over In fund financial statements, govemnmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are ported as other financing uses. Issuance costs, whether or not withheld The vacation policy of the Town provides for the accumulation of up to thirty days earned vacation leave with such leave being fully vested when earned. For the Town's govemment-wide funds, an expense and liability for compensated absences and the salary-related payments are recorded as the leave is eamed. The Town has notr recognized a current liability duet to thei immaterial nature of this liability. The Town's sick leave policy provides for an unlimited accumulation of earned sick leave. Sick leave does not vest, but any unused sick leave accumulated at the time of retirement may be used in the determination of length of service for retirement benefit purposes. Since the Town does not have any obligation for the accumulation ofs sick leave until iti is actually taken, no accrual for sick leave has been made.  8. Long-Term Obligations  thel life of the debt.  from the actual net proceeds received, are reported as debt service expenditures.  9.0 Compensated. Absences  28    Notes to the Financial Statements (continued)  10. Reimbursements for Pandemic-Related. Expenditures  InFY 2020/21, the American Rescue Plan Act (ARPA) established the Coronavirus State and Local Fiscal Recovery Funds to support urgent COVID-19 response efforts and replace lost revenue for eligible state, local, territorial, and tribal governments. The Town was allocated $863,351 of fiscal recovery funds to be paid in two equal installments. The first installment of $431,676 was received in July 2021. The second installment was received in mid-2023. The Town management and the Board of Commissioners have opted to use the ARPA funds for the Standard Allowance provision of the act. The prior year and current year's allocation totaling $863,351 was transferred toi the General Fund from the ARPA Fund during the year.  11. Net Position/ Fund Balances  Net Position  Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets, net of related debt; restricted and unrestricted. Restricted net position represent constraints on resources that are either exterally imposed by creditors, grantors, contributors, or laws or  regulations of other govemments or imposed by lawt through state statute.  Fund Balances  Ini the governmental fund financial statements, fund balance is composed of five classifications designed to  disclose the hierarchy of constraints placed onl how fund balance can be spent. The governmental fund types classify fund balances as follows:  Nonspendable Fund Balance - This classification includes amounts that cannot be spent because they are either (a) noti in spendable form or (b) legally or contractually required to be maintainedi intact. Restricted Fund Balance - This classification includes amounts that are restricted to specific purposes  externally imposed by creditors ori imposed by law.  Restricted for Stabilization by State statute portion of fund balance that is restricted by State Restricted for Streets - Powell Bill portion of fund balance that is restricted by revenue source for street construction and maintenance expenditures. This amount represents the balance of the total Restricted for Capital Project portion of fund balance that is restricted for the construction oft the Committed Fund Balance -portion of fund balance that can only be used for specific purposes imposed by majority vote by quorum of Town of Bermuda Run's governing body (highest level of decision-making authority). The govering body can, by adoption of an ordinance priort to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until as similar action  Statute [G.S. 159-8(a).  unexpended Powell Billi funds. Blue Heron trail.  is taken (the adoption of another ordinance) to remove or revise thel limitation.  29    Notes to the Financial Statements (continued)  11. Net Position/ Fund Balances (continued)  Assigned fund balance - portion of fund balance that Town of Bermuda Run intends to use for specific  purposes.  Gate Operations - portion of fund balance that intended to be used for the security gate Unassigned fund balance - the portion off fund balance that has not been restricted, committed, or assigned The Town of Bermuda Run has a revenue spending policy that provides guidance forp programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: bond proceeds, federal funds, State funds, local non-town funds, town funds. For purposes of fund balance classification expenditures are to be spent from restricted fund balance first, followed by in-order by committed fund balance, assigned fund balance and lastly unassigned fund balance. The Finance Officer has the authority  operations.  tos specific purposes or other funds.  tod deviate from this policy ifitisi in the best interest of the Town. 12. Defined Benefit Cost-Sharing Plans  For purposes of measuring the net pension asset, deferred outfiows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Local Governmental Employees' Retirement System (LGERS) and additions to/deductions from LGERS' fiduciary net position have been determined on the same basis as they are reported by LGERS. For this purpose, plan member contributions are recognized in the period in which the contributions are due. The Town of Bermuda Run's employer contributions are recognized when due and the Town of Bermuda Run has al legal requirement to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms OfLGERS. Investments are reported at fair value. A. Material Violations of Finance-Related Legal and Contractual Provisions: None  I.S Stewardship, Compliance, and Accountability:  B.E Excess of Expenditures over Appropriations: None II. Detail Notes on AlI Funds and Account Groups:  A. Assets: 1. Deposits  All the deposits of the Town and the Tourism Development Authority are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits that exceed the federal depository insurance coverage level are collateralized with securities held by the Town's or the Tourism Development Authority's agents in these units' names. Under the Pooling Method, which is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer's agent ini the name of the State Treasurer. Since the State Treasurer is acting in a fiduciary capacity for the Town and the Tourism Development Authority, these deposits are considered to be held by the Town's and the Tourism Development Authority's agents in their names. The amount of the pledged collaterali is based on an  30    Notes to the Financial Statements (continued)  1. Deposits (continued)  approval averaging method for non-interest bearing deposits and the actual current balance for interest- bearing deposits. Depositories using the Pooling Method report tot the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the Town, the Tourism Development. Authority, or the escrow agent. Because of the inability to measure the exact amounts of collateral pledged for the Town and the Tourism Development Authority under the Pooling Method, the potential exists to undercolaterzation, and this risk may increase in periods of high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The Town has no formal policy regarding custodial credit risk for deposits, but relies on the State Treasurer to enforce standards of minimum capitalization for all pooling method financial institutions and to monitor them for compliance. The Town complies with provisions of GS 159-31 when designating official depositories and verifying that deposits are properly secured. The Tourism Development Authority has no formal policy regarding custodial At June 30, 2023, the Town's deposits had a carrying amount of $2,608,565 and a bank balance of $2,770,196. The bank balances of the Town were covered by $250,000 of federal depository insurance. The remaining balance of deposits is collateralized under the Pooling Method as enumerated above. At. June 30, 2023, the TDA's deposits had a carrying amount of $212,432 and al bank balance of $212,432. The bank balances of the TDA were covered by $250,000 of federal depository insurance. Any excess  credit risk for deposits.  balance of deposits is collateralized under the Pooling Method as enumerated above.  2. Investments credit risk.  At. June 30, 2023, the Town had $328,343 invested with the North Carolina Capital Management Trust Cash Portfolio which carried a credit rating of AAAm by Standard and Poor's. The Town has no policy regarding  3. Receivable Allowances for Doubtful Accounts  The amounts presented in the Balance Sheet and the Statement of Net Position for the year ending June  30, 2023 are net of thet following allowances for doubtful accounts:  Fund None  June 30, 2023 -0-  31    Notes to the Financial Statements (continued)  4. Capital Assets Primary Government  Capital asset activity fort thel Primary Government for they year ended June: 30, 2023:  Beginning  Ending  Balances Increases (Decreases) Balances  Governmental activities: Capital assets not being depreciated: Construction inj progress Capital assets being depreciated: Roadi improvements Building Otheri improvements Equipment andf furnishings Total capital assets being depreciated: Less, accumulated depreciation for: Road improvements Building Other improvements Equipment Total accumulated depreciation  5 577,930 $2,881,220 $  $3,459,151 6,826,779 892,500 1,175,681 622,291 9,517,251 2,435,740 571,200 944,303 594,529 4,545,771 $8,430,631  6,826,778 892,500 1,175,681 622,291 9,517,250 2,206,339 535,500 878,599 580,558 4,200,995  229,400 35,700 65,704 13,971 344,775  Governmental activity capital assets, net $5,894,186 $ (344,775) $ Depreciation expense was charged to functions oft the primary govemment as follows:  General government Gate operations Transportation  $ 6 61,348 9,756 273,671 $344,775  Construction commitments  The govemment has active construction projects as of June 30, 2023. At year-end, the govemment's  commitments with contractors are as follows:  Remaining  Project  Spent-to-date Commitment 3,459,151 $ 271,867 1,808,657 5,267,808 $ 271,867  General Capital Project -Blue Heron Trail Sewer Capital Project -WWTP  32    Notes to the Financial Statements (continued)  4. Capital Assets Primary Government (continued)  Beginning Balances  Ending  Increases Decreases Balances  Business-type activities: Sewer fund: Capital assets not being depreciated: Sewer construction Capital assets being depreciated: Plant and distribution Total capital assets being depreciated: Less, accumulated depreciation for: Planta and distribution Total accumulated depreciation Business-type activity capital assets, net  200,632 $ 1,608,024 $  $1,808,656 3,313,403 3,313,403 1,620,803 1,620,803 $3,501,255  3,313,403 3,313,403 1,536,409 1,536,409  84,394 84,394  $1,977,625 $ 1,523,630 $  B. Liabilities: 1. Pension Plan Obligations:  a. Local Governmental Employees' Retirement System  Plan Description. The Town is a participating employer in the statewide Local Governmental Employees' Retirement System (LGERS), a cost-sharing muliple-employer defined benefit pension plan administered by the State of North Carolina. LGERS membership is comprised of general employees and local law enforcement officers (LEOs) of participating local governmental entities. Article 3 of G.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Management of the plan is vested in the LGERS Board of Trustees, which consists of 13 members = nine appointed by the Governor, one appointed by the State Senate, one appointed by the State House of Representatives, and the State Treasurer and State Superintendent, who serve as ex-officio members. The Local Governmental Employees' Retirement System is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, by calling (919) 981-5454, Benefits Provided. LGERS provides retirement and survivor benefits. Retirement benefits are determined as 1.85% of the member's average final compensation times the member's years of creditable service. A member's average final compensation is calculated as the average of a member's four highest consecutive years of compensation. Plan members are eligible to retire with full retirement benefits at age 65 with five years of creditable service, at age 60 with 25 years of creditable service, or at any age with 30 years of creditable service. Plan members are eligible to retire with partial retirement benefits at age 50 with 20 years of creditable service or at age 60 with five years of creditable service (age 551 for firefighters).  oratw www.osc.nc.gov.  33    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  Survivor benefits are available to eligible beneficiaries of members who die while in active service or within 180 days of their last day of service and who have either completed 20 years of creditable service regardless of age (15) years of creditable service for firefighters and rescue squad members who arel killed in the line of duty) or have completed five years of service and have reached age 60. Eligible beneficiaries may elect to receive a monthly Survivor's Alternate Benefit for life or a return oft the member's contributions. The plan does not provide for automatic post-retirement benefit increases. Increases are contingent upon LGERS plan members who are LEOS are eligible to retire with full retirement benefits at age 55 with five years of creditable service as an officer, or at any age with 30 years of creditable service. LEO plan members are eligible to retire with partial retirement benefits at age 50 with 15 years of creditable service as an officer. Survivor benefits are available to eligible beneficiaries ofl LEO members who die while in active service or within 180 days of their last day of service and who also have either completed 20 years of creditable service regardless of age, or have completed 15 years of service as a LEO and have reached age 50, or have completed five years of creditable service as a LEO and have reached age 55, or have completed 15 years of creditable service as a LEO if killed in the line of duty. Eligible beneficiaries may elect to receive ar monthly Survivor's Alternate Benefit for life or a return of the member's contributions. Contributions. Contribution provisions are established by General Statute 128-30 and may be amended only by the North Carolina General Assembly. Town employees are required to contribute 6% of their compensation. Employer contributions are actuarially determined and set annually by the LGERS Board of Trustees. The Town's contractually required contribution rate for the year ended June 30, 2023, was 12.10% for general employees actuarially determined as an amount that, when combined with employee contributions, is expected to finance the costs of benefits earned by employees during the year. Contributions to the pension planf from the Town were! $28,930 fort the year ended June 30, 2023. Refunds of Contributions Town employees who have terminated service as a contributing member of LGERS, may file an application for a refund of their contributions. By state law, refunds to members with at least five years of service include 4% interest. State law requires a 60 day waiting period after service termination before the refund may be paid. The acceptance of a refund payment cancels the individual's Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of At June 30, 2023, the Town reported a liability of $146,113 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2022. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2021. The total pension liability was then rolled forward to the measurement date of June 30, 2022 utilizing update procedures incorporating the actuarial assumptions. The Town's proportion of the net pension liability was based on a projection of the Town's long-term share of future payroll covered by the pension plan, relative to the projected future payroll covered by the pension plan of all participating LGERS employers, actuarially determined. At June 30, 2023, the Town's proportion was 0.00259% (measured as of June 30, 2022), which was an increase of0.0004%1 fromi its proportion as of. June 30, 2022 (measured as of June 30, 2021).  actuarial gains oft the plan.  right to employer contributions or any other benefit provided by LGERS.  Resources Related to Pensions  34    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  For the year ended June 30, 2023, the Town recognized pension expense of $37,513. At. June 30, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions  from the following sources:  Deferred Outflows Deferred Inflows  ofResources $  ofResources  Differences between expected and actual experience Net difference between projected and actual eamings on Changes in proportion and differences between Town contributions and proportionate share of contributions Town contributions subsequent tot the measurement date  6,296 $ 14,579 48,292 196 28,930 98,293 $  617  Changes of assumptions pension plani investments  5,456 6,073  Total  $23,879 reported as deferred outflows of resources related to pensions resulting from Town contributions subsequent to the measurement date will be recognized as a decrease of the net pension asseti in the year ended June 30, 2023. Other amounts reported as deferred inflows ofr resources related to pensions will be  recognized in pension expense as follows:  Year ended June 30: 2024 2025 2026 2027 2028 Thereafter  $  18,348 16,432 5,502 23,007  Actuarial Assumptions. The total pension liability in the December 31, 2022 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:  Inflation Salaryi increases Investment rate ofr return  2.5 percent productivity factor including inflation  3.25 percent to 8.25 percent, including inflation and 6.50 percent, net of pension plani investment expense,  35    Notes to the Financial Statements (continued)  a. Local Governmental Employees-Retirement. System (continued)  The plan currently uses mortality tables that vary by age, gender, employee group (ie., general, law enforcement officer) and health status (i.e., disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions oft the U.S. population. The healthy mortality rates also contain a provision to reflect future mortality improvements. The actuarial assumptions used in the December 31, 2021 valuation were based on the results of an actuarial experience study fort the period January 1, 20151 through December 31, 2019. Future ad hoc COLA amounts are not considered to be substantively automatic and are therefore not The projected long-term investment retums and inflation assumptions are developed through review of current and historical capital markets data, sell-side investment research, consultant whitepapers, and historical performance of investment strategies. Fixed income return projections reflect current yields across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated for multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis of the equity risk premium and the fixed income return projections. Other asset categories and strategies' return projections reflect the foregoing and historical data analysis. These projections are combined to produce the long-term expected rate of retum by weighting the expected future real rates of return by thet target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class as of June 30, 2022 are  included in the measurement.  summarized ini the following table:  Long-Term Expected Real Rate of Return  Asset Class Fixed Income Global Equity Real Estate Alternatives Credit Inflation Protection Total  Target Allocation  29.0% 42.0% 8.0% 8.0% 7.0% 6.0% 100%  1.4% 5.3% 4.3% 8.9% 6.0% 4.0%  The information above is based on 30 year expectations developed with the consulting actuary for the 2021 asset, liability, and investment policy study for the North Carolina Retirement Systems, including LGERS. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized figures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term inflation Discount rate. The discount rate used to measure the total pension liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members willl be made at the current contribution rate and that contributions from employers will be made at statutorily required  assumption of 2.50%. All rates of return andi inflation are annualized.  36    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued) projected benefit payments to determine the total pension liability.  rates, actuarially determined. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of Sensitivity of the Town's proportionate share of the net pension asset to changes in the discount rate. The following presents the Town's proportionate share of the net pension asset calculated using the discount rate of6.50 percent, as well as what the Town's proportionate share of the net pension asset or net pension liability would bei ifit were calculated using a discount rate that is one percentage point lower (5.50 percent)  or one percentage point higher (7.50 percent) than the current rate:  1% Decrease (5.50%) $  Discount Rate (6.50%)  1% Increase (7.50%) 49,202  Town's proportionate share oft the net pension liability (asset)  263,715 $ 146,113 $  Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in the separately issued Comprehensive Annual Financial Report (CAFR) for the State of North  Carolina.  b. Law Enforcement Officers Special Separation. Allowance The Town contracts all security and has no eligible law enforcement employees.  C.S Supplemental Retirement Income Plan 401K plan fore eligible employees  Plan Description. The Town contributes to the Supplemental Retirement Income Plan (Plan), a defined contribution pension plan administered by the Department of State Treasurer and al Board of Trustees. The Plan provides retirement benefits to employees employed by the Town. Article 5 of G.S. Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. The Supplemental Retirement Income Plan for employees is included in the Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State's CAFR includes the pension trust fund financial statements for the Internal Revenue Code Section 401K) plan that includes the Supplemental Retirement Income Plan for employees. That report may be obtained by writing to the Office of the State Controller, 14101 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919)981-5454. Funding Policy. Article 12E of G.S. Chapter 143 requires the Town to contribute each month an amount equal to five percent of each employee's salary, and all amounts contributed are vested immediately. Also, The Town made contributions of $22,812 for ther reporting year. No amounts were forfeited. The Town has note established policies concerning post-employment benefits as of June 30, 2023.  the employees may make voluntary contributions to the plan.  d. Other Post-employment Benefits  37    Notes to the Financial Statements (continued)  2. Deferred Outflows and Inflows of Resources Deferred outflows ofr resources are comprised of the following:  Source  Amount $  Differences between expected and actual experience Net difference between projected and actual eamings on Changes inp proportion and differences between employer contributions and proportionate share of contributions Town contributions subsequent tot the measurement date  6,296 14,579 48,292 196 28,930 98,293  Changes in assumptions pension plani investments  Total  $  Deferred inflows of resources at) year-end are comprised of thet following:  Statement of Net General Fund  Position $  Balance Sheet $ 27,399 617  Taxes Receivable, less penalties (General Fund) Differences between expected and actual experience  Changes in assumptions  Changes inj proportion and differences between employer contributions and proportionate share of contributions  5,456 6,073 $  Total 3. Risk Management  $  27,399  The Town is exposed to various risks of loss related to torts; theft or damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Town participates in three self- funded risk financing pools administered by thel North Carolina League of Municipalities. Through these pools, the Town obtains general liability and auto liability coverage of $3 million per occurrence, property coverage up to $20 million per building per occurrence, workers' compensation coverage up tot the statutory limits, and employee health coverage up to a $1 million lifetime limit. The pools are reinsured through commercial companies for single occurrence claims against general liability and auto liability in excess of $500,000, up to $500,000 for property, and $250,000 upt to $5 million for workers' compensation. The pools are reinsured for annual employee health claims in excess of $150,000. The property liability pool has an aggregate limit of $1,000,0001 for the aggregate losses in a single year. After the property pool has paid out $1,000,000, then the pool will be liable for a $10,000 per claim maintenance deductible on future property losses for that year. The remainder of each claim will be bome byt the re-insurer. The Town currently has no In accordance with G.S. 159-29, the Town's employees that have access to $100 or more at any given time of the Town's funds are performance bonded through a commercial surety bond. The finance officer is  floodi insurance coverage.  individually bonded for $200,000.  38    Notes to the Financial Statements (continued)  4. Long-Term Obligations: a.0 Changes in Long-term Liabilities Governmental activities: Installment Note Net Pension Liability (LGERS) Accrued' Vacation  Balance $  Balance Current Portion  June 30,2022 Increases Decreases June 30, 2023 of Balance  $ 40,334 105,779 8,548  $ $ $ 146,113 3,463 5,085  $ 48,882 $1 105,779 $ 3,463 $ 151,198 $  Compensated absences for governmental activities have typically been liquidated in the General Fund. At. June 30, 2023, the Town of Bermuda Run had bonds authorized but un-issued of $-0- and al legal debt  margin of$53,133,013. C. Interfund Balances and Activity  Balances due to/from other funds at. June 30, 2023, consist of the following:  Due tolfrom other funds: To From From To From  General Fund General Fund Capital Project Sewer Fund Sewer Fund Sewer Fund Capital Project  $ 229,004 $ 191,027 $ 37,978 $ 1,816,941 1,816,941  The interfund balances resulted from the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, (2) transactions are recorded in the accounting system, The General Fund has advanced the General Fund Capital Project Fund proceeds needed for various expenditures. The General Fund anticipates a repayment arrangement after the project is completed. The ARPA Fund transferred proceeds that the government must account for in other funds in accordance with  and (3) payments between funds are made.  budgetary authorizations. D. Net Investment in Capital Assets  Governmental Business-type 8,430,631 $ 3,501,255  Capital Assets less: long-term debt add: unexpended debt proceeds Neti investment in capital assets  8,430,631  3,501,255  39    Notes to the Financial Statements (continued)  E. Fund Balance  The following schedule provides management and citizens with information on the portion of General fund  balance thati is available for appropriation:  Total fund balance General Fund Less: Stabilization by State Statute Streets Powell Bill Remaining Fund Balance  $ 2,204,841 440,963 410,135 $ 1,353,743  The outstanding encumbrances are amounts needed to pay any commitments related to purchase orders  and contracts that remain unperformed at year-end.  Encumbrances $0  General Fund $0  Non-Major Funds $0  IV. Summary Disclosure of Significant Contingencies Federal and State Assisted Programs  The Town has received proceeds from several federal and State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant moneys to the grantor agencies. Management believes that any required refunds will be immaterial. No provision has been made in the accompanying  financial statements fort the refund ofç grant moneys. V.Consideration of Change in Accounting Principal  GASB Statement No. 96, Subscrption-Based Information Technology Arrangements, was considered for the current year. However, it was determined the implementation would not have a material affect on the GASB Statement No. 87, Leases, was considered for the current year. However, it was determined the implementation would not have a material affect on the financials. Accordingly, there is no restatement to  financials. Accordingly, there is no restatement to report.  report.  VI. Significant Effects of Subsequent Events  Subsequent events occurring after the statement of financial position date have been evaluated through October 5, 2023, which is the date the financial statements were available to be issued. No material  subsequent events were noted.  40    4  2  00    4    Town of Bermuda Run, North Carolina For the' Year Ended June 30, 2023  General Fund  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts fort the Year Ended June 30, 2022)  Variance Favorable (Unfavorable)  Actual- Year Ended June 30, 2022 $ 952,456 13,602 552 966,609 429,253 429,253 203,695 12,414 216,109 79,863 33,000 204,397 317,260 5,450 23,989 100,000 123,989 2,058,670  Budget  Actual $ 942,956 47,410 180 990,546 $ 452,956 452,956 218,968 14,648 233,616 81,170 5,600 229,342 316,112 17,203 10,231 130,000 140,231 2,150,665  Revenues: Ad Valorem taxes (net ofr refunds) Current! levies Prior levies Penalties andi interest Other taxes andl licenses: Local option sales tax Unrestricted intergovernmental revenues: Utilities franchise tax Beer and wine tax Restrictedi ntergovernmental revenues: Powell Bill allocation Davie Community Foundation ABC revenues Investment earnings Other revenues: Other income  $ 957,860  32,686 (2,044)  455,000  236,000  (2,384)  306,000 16,500  10,112 703  Reimbursement: for administrative charges  151,000 2,122,360 181,500 2,303,860  (10,769) 28,305 (181,500) (153,195)  Total Revenues Othert financing sources: Appropriated fund balance Total revenues and other financing sources  2,150,665  2,058,670  43    Town of Bermuda Run, North Carolina  Statement of Revenues, Expenditures and Changes in Fund Balance- Budget and Actual (continued)  Variance Favorable (Unfavorable) June: 30, 2022  Actual-Year Ended  Budget  Actual  Expenditures: General Government Governing Body Administration: Salaries and Employeel Benefits Operating Expenses Professional Services Tax collectioni fees Town Halle expenses Capitalo outlay Ignite Davie Consulting and contract labor Election costs Community Services: Planning and: zoning Ground/ generalr maintenance Leafr removal Waster removal Townp projects Post office Davie Community Foundation expenses Capitald outlay Other Total General Govemment Safety- Community police program Transportation: Street Department: Engineering Repairs- streets Other Streetli lights Street ROW maintenance Capital outiay Powell- streetr repairs Total" Transportation Debts service: Principal Interest Total Expenditures Revenues over Expenditures Other Financing Sources (Uses) Transfert tog general capital project Transferf from ARPAf fund Transfer tos sewer fund Excess of revenues ando other sources over (under)e expenditures and other uses Fund Balance: Beginning of Year, July1 End ofYear, June 30  $ 13,900 $ 13,820 $  80 $ 10,639  334,916 92,487 77,575 34,431 22,865 35,000 51,403 1,885 650,561 50,374 50,175 46,138 291,755 112,794 842 16,585 66,704 635,367 1,299,748 70,664 39,089 276,379 117,007 104,188 12,887 549,552  276,120 98,255 43,300 18,898 36,073 4,635 477,280 49,557 46,076 41,520 281,604 427,413 798 21,850 59,752 928,570 1,416,489 87,022 87,008 400,507 103,835 93,806 22,211 76,089 783,455  715,688  65,127  647,972 1,377,560 96,000  12,605 77,812 25,336  918,300  368,748  2,391,860 (88,000) (777,000) 865,000  1,919,964 230,701 (776,623) 864,286  471,896 318,701 377 (714)  2,286,966 (228,296) (809,811) (1,038,107) 2,924,584 1,886,477  318,364 $ 318,364 1,886,477 2,204,841  44    Town of Bermuda Run, North Carolina Special Revenue Fund Gated Security For the Year Ended June 30, 2023  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30, 2022)  Variance Favorable (Unfavorable)  Actual -Year Ended June 30, 2022 $ 571,768 571,768  Budget  Actual $ 659,362  Operating revenues: Gate fees Insurance proceeds Fund balance appropriated Total revenue and other financing sources Operating expenditures: Administrative Gate operations expense Other Financing Sources (Uses) Transfer to other funds Total other financing sources (uses) Total expenditures and other financing uses Revenues over (under) expenditures Fund Balance: Beginning ofy year End ofy year  $ 679,600  659,362 $ (20,238)  679,600  659,362  (20,238)  571,768  65,000 595,211 660,211  50,000 617,577 667,577  679,600  19,389  679,600  660,211  19,389 (850)  667,577 (95,810) 217,485 121,676  $  (850) $ 121,676 120,826  45    Town of Bermuda Run North Carolina General Capital Projects Fund - Blue Heron Trail From inception and for the fiscal year ended June 30, 2023  Statement of Revenues, Expenditures and Changes in Fund Balance Budget and Actual  Actual Current Year  Variance Favorable (Unfavorable)  Project Authorization  Prior Year  Total to Date  Revenues: NCDOTF Funds Total revenues Expenditures: Construction CElservices NCDOT project oversight Administration Total expenditures Revenues over expenditures Other financing sources: Transfer from general fund Total other financing sources Net changei in fund! balance Fund Balance: Beginning ofy year End ofy year  2,954,395 $ 462,345 $ 2,279,933 $ 2,742,278 $ (212,117)  2,954,395  462,345 539,633 38,298 577,931 (115,586)  2,279,933 2,375,173 479,646 1,798 24,605 2,881,220 (601,287) 776,623 776,623  2,742,278 2,914,805 517,944 1,798 24,605 3,459,151 (716,873) 776,623 776,623  (212,117) (113,073) 39,431 334,114 11,395 271,867 (59,749)  2,801,732 557,375 335,911 36,000 3,731,018 (776,623) 776,623 776,623  (115,586) $ 175,336  59,749 $ (59,749)  (115,586) $ 59,749  46    Town of Bermuda Run, North Carolina American Rescue Plan Fund For the Year Ended. June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30,2022)  Variance Favorable (Unfavorable)  2022 Actual $  Budget  Actual $ 863,359 610 863,969 $ (1,031)  REVENUES: ARP Funds Interest income ARPI Funds EXPENDITURES: Transfers out- General Fund Net changei ini fund balance Fund! balances- beginning ofy year Fund balances end ofy year  317 317  $ 865,000  865,000 865,000  864,286 864,286 (317) $ 317  714 714 317  317  $  317  47    Town of Bermuda Run, North Carolina Sewer Fund For the' Year Ended June 30, 2023  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the) Year Ended. June 30,2 2022)  Variance Favorable  Actual- Year Ended 607,425 2,550 609,975  Budget  Actual 670,501 670,501  (Unfavorable) June 30, 2022  Operating revenues: Sewer charges Tapi fees  530,850  139,651  Other financing sources: Transfer from general fund Appropriated fund balance Total revenue and other financing sources Operating expenditures: Administrative Licenses Charges from general fund Sewer operations: Plant operations Maintenance Engineering Repairs -plant Repairs lines Utilities Capital outlay Other  530,850  670,501  139,651  609,975  1,210 65,000 66,210 44,246 4,598 16,465 33,505 264,984 363,798 430,008  3,116 50,000 53,116 63,123 53,912 11,707 15,684 37,782 14,092 196,299 249,415  51,200  (15,010)  479,650 530,850  115,852 100,842  Total operating expenditures Other budgetary appropriations: Principal paid on long-term debt Interest paid Total expenditures and budgetary appropriations Total revenue and other financing sources over (under) expenditures and budgetary appropriations  530,850  430,008  100,842  249,415  $  240,493  240,493  360,560  48    Town of Bermuda Run, North Carolina Sewer Fund (continued) Fort the Year Ended June 30, 2023  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30, 4 2022)  2023 Actual  2022 Actual  Reconciliation of Modified Accrual Basis to Full Accrual Basis:  Total Revenues and Other Financing Sources Total Expenditures and Budgetary Appropriations Excess of Revenues Over (Under) Expenditures Capital outlay Capital project grants Depreciation  $ 670,501  $ 609,975  430,008 240,493  249,415 360,560  1,800,000 (84,394)  (85,371)  Changei in net position  1,956,099  $ 275,189  49    Town of Bermuda Run North Carolina Sewer Capital Project Fund- - WWTP  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) From inception and for the fiscal year ended June 30,2023  Actual Current Year  Variance Favorable (Unfavorable)  Project Authorization 1 1,800,000 $ 1,800,000  Prior Year  Total to Date  Revenues: Grants Total revenues Expenditures: Construction Administration Total expenditures Revenues over expenditures Other financing sources: Transfer from Sewer Fund Total othert financing sources Revenues and other sources over (under)e expenditures  $1,800,000 $ 1,800,000 $  1,800,000  1,800,000 1,575,760 232,897 1,808,657 (8,657)  1,575,760 232,897 1,808,657 (8,657) 8,657 8,657  200,632 200,632 (200,632)  1,375,127 232,897 1,608,024 191,976  8,657 8,657 8,657  $  ( (200,632)  191,976 $ (8,657) $  50    Town of Bermuda Run, North Carolina Schedule of Changes in Ad Valorem Taxes Receivable Fort the Year ended. June 30, 2023  Balance June 30, 2022 $  Collections and Credits $ 976,263 3,835 878 (730) 369 11  Balance June 30, 2023 $  Year ofLevy 2022-2023 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 2015-2016 2014-2015 2013-2014 2012-2013 2011-2012  Additions $ 996,244  19,981 2,109 1,274 1,439 425 276 346 680 387 124 358  5,944 2,152 709 794 287 346 680 387 124 303 197 11,923  (55) 197 980,768  $  $  996,244  $  Ad' Valorem Taxes Receivable- Net Reconcilement with Revenues: Tax- Ad' Valorem Adjustments  $ $  27,399 990,366 197 (9,795) 980,768  Amounts written offp per statute ofl limitations Total collections and credits  $  51    Town of Bermuda Run, North Carolina Analysis of Current Tax Levy Fort the' Year Ended. June 30, 2023  TotalL Levy  Property excluding Registered Motor Vehicles 907,842 6,972 (238) 914,576 19,981 894,595 97.82%  Registered Motor Vehicles $ 81,668  Property  Total  Valuation Rate Levy $659,673,333 0.15 $ 989,510  TaxL Levy- Town Wide Discoveries Abatements and Releases Total for Year  4,648,000 (158,667) $664,162,667  6,972 (238) 996,244 19,981 976,263 97.99%  81,668  Less, Uncollected" Tax at. June 30, 2023 Current' Year's Taxes Collected Percent Current Year Collected  81,668 100.00%  52    EDDIE CARRICK, CPA, PC Certified Public Accountant  Report On Internal Control Over Financial Reporting And On Compliance and Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government. Auditing Standards  Independent. Auditor's Report  Tot the Honorable Mayor and Town Council Town of Bermuda Run, North Carolina  We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund information of the Town of Bermuda Run, North Carolina, as of and for the year ended June 30, 2023 and the related notes to the financial statements, which collectively comprises the Town of Bermuda Run's basic financial statements, and have  issued our report thereon dated October 5, 2023. Internal Control Over Financial Reporting  Inp planning and performing my audit oft the financial statements, we considered the Town of Bermuda Run's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Bermuda Run's internal control. Accordingly, we do not A deficiency in intemal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, ora combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented or detected and corrected on a timely basis. A: significant deficiency is a deficiency or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit Our consideration oft the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described ini the accompanying schedule of findings and responses/schedule of findings and questioned costs we identified certain deficiencies as item 2023-1that we consider to be as significant deficiency.  express an opinion ont the effectiveness of the Town's internal control.  attention by those charged with governance.  Member of the, American. Institute ofCertified/ Public Accountants  53  151 Young Drive, Lexington, NC: 27292 336-249-2545, Fax 336-249-4745    Report on Compliance and Other Matters  As part of obtaining reasonable assurance about whether the Town of Bermuda Run's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Govemment  Auditing Standards.  Town of Bermuda Run's Response to Findings  Government Auditing Standards requires the auditor to perform limited procedures on the Town's responses to the findings identified in our audit are described in the accompanying schedule of findings and responses Ischedule of findings and questioned costs. The Town's response was not subjected to the auditing procedures applied in the  audit oft the financial statements and, accordingly, we express no opinion on it.  Purpose oft this Report  The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the Town's internal control or on compliance. This report is an integral part of an audit performed in accordance with Govemnment. Auditing Standards ino considering the Town's internal control and compliance. Accordingly, this communication is not suitable for any  other purpose. Eddie Carrick, CPA  Cce.ct  Lexington, North Carolina October5, 2023  54    EDDIE CARRICK, CPA, PC Certified Public Accountant  Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; With  OMB Uniform Guidance and the State Single Audit Implementation Act  Independent Auditor's Report  Tot the Honorable Mayor and Members of the Town Council Town of Bermudal Run, North Carolina Report on Compliance for Each Major Federal Program Opinion on Each Major Federal Program  We have audited the Town of Bermuda Run, North Carolina, compliance with the types of compliance requirements described in the OMB Compliance Supplement and the Audit Manual for Govemmental Auditors in North Carolina, issued by the Local Govemment Commission, that could have a direct and material effect on each of the Town of Bermuda Run's major federal programs for the year ended June 30, 2023. The Town of Bermuda Run's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings In our opinion, the Town of Bermuda Run complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the State Single Audit Implementation Act. Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of The Town of Bermuda Run and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the Town of Bermuda Run's Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to The Town of Bermuda  and questioned costs.  the year ended June 30, 2023.  Basis for Opinion on Each Major Federal Program  compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance  Run's federal programs.  Auditor's Responsibilities for the Audit of Compliance  Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on The Town of Bermuda Run's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Govemment Auditing Standards, and the Uniform Guidance will always detect material noncompliance when ite exists. The risk of not detecting material noncompliance resulting from fraud is higher than that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the  Member oft the American. Institute ofCertifiedi Public Accountants  55  151 Young Drive, Lexington, NC27292 336-249-2545, Fax: 336-249-4745    report on compliance about The Town of Bermuda Run's compliance with the requirements of each major federal Inp performing an audit in accordance with GAAS, Govemment. Auditing. Standards, and the Uniform Guidance, we exercise professional judgment and maintain professional skepticism throughout the audit. identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding The Town of Bermuda Run's compliance with the compliance requirements referred to above and performing such other procedures as We considered necessary int the circumstances. obtain an understanding of The Town of Bermuda Run's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of The Town of Bermuda Run's internal control over compliance. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over  program as a whole.  Accordingly, no such opinion is expressed.  compliance that Wei identified during the audit. Report on Internal Control Over Compliance  A deficiency in intemal control over compliance exists when the design or operation of a control over compliance does nota allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with at type of compliance requirement of ai federal program on a timely basis. A material weakness in intemal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of at federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in intemal control over compliance, yet important enough to merit attention by those charged with Our consideration of internal control over compliance was for the limited purpose described in Auditor's Responsibilities for the Audit of Compliance section and above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies or material weaknesses in internal control over compliance. Given these limitations, during our audit, we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over The purpose oft this report oni internal control over compliance is solely to describe the scope of our testing ofi internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.  governance.  weaknesses or significant deficiencies may exist that were not identified. compliance. Accordingly, no such opinion is expressed. Accordingly, this reporti is not suitable for any other purpose.  Eddie Carrick, CPA,PC  AC.CAE  Lexington, North Carolina October 5, 2023  56    Statement 1  Town of Bermuda Run, North Carolina Schedule of Findings and Questioned Costs For the Year Ended June 30, 2023  Summary of Auditor's Results Financial statements  Type ofauditor's reporti issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? Significant Deficiency(s) identified that are noto considered to ber material weaknesses? Noncompliance material to financial statements noted Federal and state awards  yes X no  X yes  no  yes X no  Material weakness(es) identified? Significant Deficiency(s) identified that are not considered to! be material weaknesses?  yes X no  yes X none reported  Type of auditor's reporti issued on compliance for major federal programs: unqualified  Any auditf findings disclosed that are required tol be accordance with 20 CFR2 200.516(a)? Identification of major federal programs:  yes  no  Program Name  FAL# 21.027 20.205  Coronavirus State and! Local Fiscal Relief Funds Highway Planning and Construction  Dollar threshhold to distinguish between Type A and" Type Bp programs:  $750,000 yes X no  Auditee qualified as lowr risk auditee?  57    Statement 1 (continued)  Town of Bermuda Run, North Carolina Financial Statement Findings Fort the Year Ended June 30, 2023  Financial Statement Findings Significant Deficiencies 2023-01 Segregation of Duties  Criteria: The assignment of responsibilities should be segregated sot thato one person is notr responsible fort the authorization and recording of at transaction and the custody oft ther related asset. There needs tol be ar reconciliation or control activity to provide reasonable assurance that transactions are! handled properly. Condition: Key duties andf functions are not segregated amount Town personnel. This is especially a concern int thec cash management, account receivable, purchasing, and payroll functions ina all departments.  Effect:  Transaction could be mishandled, due to errors ort fraud that could leadt to loss of assets ort the reporting  ofmisleading financial information.  Cause: There are al limited number of personnel for certain functions. dentification of a repeat finding: Thisi is a repeatf finding from thei immediate previous audit. Recommendation: The duties should be separated as much as possible, by possibly training and utilizing non-financial personnel and utlizing alternative controls. The governing Board should provide some oft these controls Views of responsible officials and planned corrective actions: The Town agrees with this finding and willa adhere to  the corrective action plan on page! 59 int this auditr report. Federal Award Findings and Questioned Costs  None reported  58    BERMU  1201 Kinderton Boulevard, Suite 100 . Bermuda Run, NC 27006 (336,998-0906-Faxt (336) 998-7209- . www.townofbr.com  Town of Bermuda Run, North Carolina Corrective Action Plan For the Year Ended June 30, 2023  Financial Statement Findings Significant Deficiencies 2023-01 Segregation of Duties  Name of contact person: Andrew! Meadwell, Town manager  Corrective Action: Duties andi functions will be reviewed to determine where segregation needs to occor. The duties will be separated as much as possible and alternative controls willl bei implemented to compensate for lack of segregatoin. However, ther risk of nots segregated certain duties are not worth the additional costs. Nonfinancial employees will be trained andj provide some assistance. The Town hasi implemented the Finance Director prepares deposits and the Town Manager or Town Clerk signs off on deposit.  following mitigating factors:  Bank reconciliations are reviewed monthly by" Town Manager. Financials are reviewed by Town Council monthly. ( Quarterly financials are reviewed by an outside CPA. Dual check signatures with backup are required.  Proposed Completion Date: The Board willi implement the above procedure immediately.  Federal Award Findings and Questioned Costs  None reported  59    The Town of Bermuda Run Schedule of Federal and State Financial Assistance Fort the year ended June 30,2023  FEDERAL (DIRECT)  STATE (DIRECT)  FEDERAL STATE  GRANTOR/PASSTHROUGH GRANTOR/PROGRAMTTE Federal grants USDEPARTMENTOF TREASURY Coronavirus State and Local Recovery Fund Direct Funding Pass-through from Davie County, NC FEDERALHIGHWAYADMNSTRATION Passed-throughi the N.C. Department ofl Transportation: Highway Planning and Construction State Grants None  ASSISTANCE GRANTOR'S PASS THROUGH PASS THROUGH LISTINGNO. NUMBER EXPENDITURES EXPENDITURES  21.027 21.027  $ 863,359 ** 1,608,021 **  20.205  2,881,220 **  5,352,600 $  ** Major programs  Notest tot the Schedule ofE Expenditures of Federal and State Financial Awards:  Note 1: Basis of Presentation  The accompanying schedule ofe expenditures off federal and State awards includes the federal and State grant activity oft the Town of Bermuda Run, North Carolina, Inc. andi is presented ont the modified accrual basis of accounting. Thei information int this schedulei is presentedi in accordance with the requirements of Tite 2US Code of Federal Regulations Part 200, Uniform Administrative. Requirements, Cost Principles and/ Audit Requirements for Federal Awards (Uniform Guidance), Audits of States, Local Governments, and Non-Profit Organizations and the State Single Audit Implementation. Act. Therefore, some amounts presented int this schedule may differt from amounts presented in, or use Expenditures reported int the SEFA: are reported ont the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained inl Uniform Guidance, wherein certain types ofe expenditures are not allowable or arel limited as to reimbursement.  int the preparation oft the basic financial statements. Note 2: Summary of Significant Acounting Policies  60