EDINBURG, RGV – Edinburg Economic Development Corporation is in a good financial position and primed for rapid growth, according to city auditors who released their opinion on the corporation’s finances for fiscal year 2015.
Appearing at the EEDC Board’s regular meeting on Tuesday, Noel Garza, a certified public accountant hired to conduct the audit, issued an “unmodified” opinion to board members.
“The best opinion we can give is an unmodified opinion. That means that we found nothing that required us to modify the report, which typically would be if we found an area that we didn’t agree with or feel uncomfortable,” Garza said. “But we did issue an unmodified to the city because we do feel comfortable with these financial statements. As a result of our testing, we feel this is a fair representation.”
Auditors may hand down several opinions as a result of their findings. Aside from an unmodified opinion they may issue a “disclaimer” because they are not comfortable with the financial statements. An “adverse” opinion is issued when auditors feel that financial statements are unreliable.
Garza said Edinburg EDC has received unmodified status since he began as their auditor five years ago.
“They have always been unmodified. We have never had an issue where we felt that we couldn’t rely on these financial statements,” Garza said. “They have a good system and they utilize the city for a lot of their accounting and their financials, bill paying and payroll. They do receive a lot of transaction and information from the city so that adds to our level of confidence of the documentation. “
The Edinburg EDC is currently sitting on a $3 million fund balance, or cash on hand out of a total $18 million. More than $15 million is tied in receivables, citing loans issued to Santana Textiles in order to bring their facilities to operational status, Garza said.
Revenues at the EDC increased by $400,000, or 10 percent, due to an uptick in sales tax, Garza said.
The EEDC uses its one-half cent local sales tax to help generate economic development in the city. The sales tax, formally known as the State Sales and Use Tax, is imposed on all retail sales, leases and rentals of most goods, as well as taxable services. Texas cities, counties, transit authorities and special purpose districts have the option of imposing an additional local sales tax for a combined total of state and local taxes of 8 ¼ percent (.0825).
Governments, municipalities and school districts are all required by law to have an audit, but an EDC is a unique because they are quasi-governmental as well as a non-profit corporation chartered under the state, according to Garza. Since the EDC is a component of the city, that requires them to have an audit to be included with the city.
The primary purpose of an audit is to render an opinion on the corporation’s financial statements, which are the responsibility of the client.
Auditor’s say it’s their responsibility to issue an opinion on those based on their audit work.
“So we go through this process where we go through and test the numbers and look at those numbers and analyze and conduct detailed testing in order to satisfy ourselves that those numbers are a fair representation of the financial statements,” Garza said.
“Overall, it’s related to the financials. It’s everything from requesting checks, payroll processing, their bidding and documentation related to their minutes. It encompasses anything and everything that could affect financial statements.”
Editor’s Note: Pictured in the main photo accompanying this story are Edinburg EDC Executive Director Gus Garcia, Edinburg EDC Board Member Mark Iglesias, Edinburg Mayor and Edinburg EDC Chairman Richard Garcia, and Edinburg EDC Board Members Harvey Rodriguez and Rolando ‘Ronnie’ Guerra. The one Edinburg EDC board member not pictured is Ellie M. Torres.