At a workshop of the Custer County Board of Commissioners, auditor Sam Donardo presented the county's draft annual financial report and accompanying single-audit materials, telling commissioners the independent opinion on the financial statements is unmodified and that the audit found no questioned costs for the federal programs tested.

The draft report covers full-accrual government-wide statements, government fund statements, notes, and required supplementary information. Donardo said the county's consolidated financial statements "fairly present financial position and results of operations as they apply to governmental entities." He also noted the county's federal expenditures exceeded the single-audit threshold (historically $750,000), so the county underwent compliance testing of major programs; Donardo reported no compliance findings that rose to questioned costs.

Why it matters: an unmodified auditor's opinion signals that an independent auditor judged the financial statements to be presented fairly under applicable accounting standards, and the absence of questioned costs in the single-audit testing reduces the risk of federal grant disallowances. Commissioners and staff spent the bulk of the discussion on management-letter recommendations and outstanding internal-control and reporting items that the auditor said remain to be addressed.

Key findings and numbers: Donardo highlighted several specific items from the draft and management letter. The county reported roughly $880,000 in federal expenditures on the schedule of expenditures of federal awards, which triggered single-audit reporting for the year under review. The general fund showed an increase in fund balance of $404,917 for the year. The county recorded a capital purchase for the landfill compactor with an equipment cost of about $680,000, an approximate down payment of $80,000 and a financed portion reported as $600,000 (recognized in the capital improvement fund as "proceeds from leases"). The auditor also noted outstanding interfund balances originated in prior years totaling $386,481.11 that should be cleared.

Repeated management-letter issues: the management-letter section of the draft contains no new observations for the year but reiterates longer-standing control and reporting matters. Donardo and staff discussed these recurring items, which include: developing a comprehensive, documented set of written financial policies and procedures; improving identification, monitoring and archiving of leases and subscription-based IT agreements for GASB 87 and related standards; clearing longstanding interfund receivable/payable balances; improving account reconciliations after the county's accounting-system conversion; performing monthly payroll-to-ledger reconciliations; and strengthening grant accounting and documentation across departments.

On the landfill, the audit includes the required disclosure of estimated closure and post-closure costs (an engineer's present-value estimate) and related long-term obligations; Donardo said the engineer's update was completed in October and that the estimate is included in the long-term obligations footnote. The auditor also identified the landfill compactor purchase as the largest single financed transaction in the year and suggested combining the financing approval and related budget amendment in a single board resolution for clarity and transparency.

Staff direction and next steps: commissioners and staff agreed on several near-term follow-ups discussed in the workshop. Donardo said auditors will finalize minor cosmetic edits and then upload the final report and single-audit submission to the state auditor's office and the federal single-audit clearinghouse before the statutory submission deadline (the auditor identified September 30 as the filing deadline). He said he would leave supporting worksheets with county staff. County staff and commissioners discussed preparing a companion status document that lists the audit's prior and current-year findings, implementation status, and target dates for completion so the board can track progress.

What was not decided: the workshop included no formal votes or ordinance actions; the items discussed in the management letter remain recommendations. Commissioners asked staff to return with updates and proposed resolutions (for example, to clear interfund balances and adopt or finalize written policies), but the transcript records no formal motions or final board decisions at the session.

Context and expectations: Donardo reviewed the financial-statement presentation formats required by GASB, explained differences between the government-wide accrual statements and fund-basis statements used for budgeting, and outlined upcoming GASB pronouncements that will affect future presentations and disclosures. He said some disclosure and reporting changes required by newer GASB guidance will be implemented in coming years but did not report any inability to comply. The auditor called the absence of current-year questioned costs a positive outcome while urging the county to continue addressing the repeated deficiencies the audit identified.

Ending: county staff and the auditor agreed to finish edits and proceed with the scheduled filings; commissioners asked staff to return with status updates on the management-letter items, a list of adopted policies, and plans to clear the recorded interfund balances.