Kingsport finances receive clean audit for fiscal year 2025

Finance officials with the City of Kingsport recently presented the Board of Mayor and Aldermen with an overview of the city’s Annual Comprehensive Financial Report. The ACFR is a review of the city’s finances for the prior fiscal year, which ran from July 1, 2024, to June 30, 2025.

The ACFR provides a comprehensive, independently audited review of the city’s financial position and operations. The report includes detailed information across 37 separate funds and addresses key financial areas including cash management, long-term debt and capital assets.

Independent auditors issued an unmodified (“clean”) opinion on the city’s financial statements, representing the highest level of assurance that can be provided. This marks the 27th consecutive year Kingsport has received such an opinion. Additionally, for the 25th consecutive year, Kingsport’s ACFR earned the Certificate of Achievement for Excellence in Financial Reporting.

Key highlights from the FY 2025 ACFR include:

• Kingsport maintained a fund balance (rainy-day fund) of $25.3 million, representing approximately 25% of the general fund budget, exceeding the city’s policy target of 15% to 20%.
• Property tax collections totaled $61.5 million, compared to $57.8 million in the prior year, while local sales tax collections totaled $51.9 million, compared to $49.8 million in the prior year. Kingsport’s property tax rate is $1.9983 per $100 of assessed value.
• The general fund increased fund balance in the amount of $853,264. General Fund annual expenditures and transfers out totaled $100.5 million and was within 1% of the original budget.
• General fund debt service payments totaled $16.1 million during the fiscal year, with total governmental fund debt at $124.5 million.
• Moody’s Investors Service and S&P Global Ratings reaffirmed Kingsport’s strong credit ratings of Aa2 and AA, respectively. The local unemployment rate stood at 4.5% as of June 2025.

Auditors identified one internal control matter as a significant deficiency related to the timing of pooled cash reconciliations. In addition, two compliance findings were reported concerning nepotism policy adherence and a minor budget over-expenditure of $83. Kingsport officials have acknowledged these matters and are taking appropriate corrective actions.

City leadership emphasized that the annual audit and ACFR process reflect Kingsport’s ongoing commitment to transparency, fiscal responsibility and long-term financial stability.

To view the entire ACFR, visit https://bit.ly/2025ACFR or go to www.kingsporttn.gov and select “Finance” under the “Government” link.