Wilmington audit office proposes $1.3 million FY26 budget; council presses on reassessment and audit scope

The Wilmington City audit department presented a proposed FY2026 operating budget of $1.3 million across all funds to the Finance Committee, outlining staffing additions and new subscription costs while council members asked about the city’s ability to review a county‑led property reassessment.

The proposed FY26 audit budget totals $1,300,000 with $1,200,000 in the general fund (a 22.6% increase) and $139,000 in the water/sewer fund. The plan includes one new senior IT auditor position, three upgraded senior auditor classifications, and a net staff total of six full‑time equivalent positions, up by one from FY25.

Why it matters: the audit office is the city’s independent internal oversight function; changes in staffing and outside contracts affect the office’s capacity to perform audits, follow up on management action plans and investigate fraud reports. Council members pressed the office about whether it can audit Newcastle County’s court‑ordered property reassessment, and on how new tools and vendors will be used.

The audit director’s presentation said personal services account for most of the increase: three senior positions were upgraded mid‑year FY25 and the FY26 budget includes a senior IT auditor at about $118,000 in salary and benefits and roughly $23,000 for temporary staffing support. Materials and subscriptions rose, including a $46,000 line for Gartner research services.

City Auditor Terrence Williams summarized the audit office’s priorities as ‘‘to conduct quality audits, provide timely and consistent audit follow ups with management, and also to promote awareness of the fraud hotline.’’ Williams and audit manager Tamara Thompson gave the committee a review of performance measures and answered council questions about past and planned audit work.

On the county property tax reassessment, Williams told the committee: "As of this moment, we do not have any plans to audit the county files because we don't have those records." He said the city has requested the county’s underlying methodology from Newcastle County and that county‑level auditors would likely be best positioned to audit the reassessment methodology once the county and vendor provide the data. Deputy Chief of Staff Stephanie Mergler told members the county expects to provide methodology information by June or July.

Committee members pressed whether the audit office could hire outside contractors to review the reassessment files once received. Williams said the office would evaluate options after it has the data and a clear objective for what an audit would cover, noting constraints on vendor contracts and the city’s current licensing for data‑analytics tools.

On outside consultants and contract auditors: the audit office reported $198,000 budgeted for external audit fees (the city’s external audit contract with its external auditors was described as a $198,000, three‑year agreement with one‑year extension options). The audit office named multiple outside firms used for specific, recent external audits and reviews and said some external engagements were performed by firms retained specifically for single audits or federal grant reviews.

Fraud hotline and investigations: the audit office budget includes $1,000 for fraud‑hotline outreach; Williams reported 6 calls in FY23, 4 calls in FY24 and 4 calls FY25 year‑to‑date. He said the office has used radio, TV and online advertising and posters for awareness and that the office investigated calls that led to confirmed fraud in recent years, including a matter that helped prevent revenue loss when checks were altered.

Planned audit work and capacity: Williams said FY25 had 13 planned audits with four completed to date and four in progress; 4 audits are planned to carry forward into FY26. The FY26 audit plan was described as pending the annual risk assessment and additional inputs from departments.

What’s next: council members asked the audit office to remain prepared to reallocate audit capacity if the reassessment data arrives and the matter warrants a dedicated review. Williams said the office routinely updates its plan via the annual risk assessment and can reprioritize if council or the administration directs additional work.

Ending note: the audit office and OMB said they would provide follow‑up answers to specific council requests and that Ms. Bass Knight (council staff) will track those items.