Auditor General presents FY2024 audit; finds reporting delays, procurement issues, and two federal compliance failures

The Arizona Auditor General presented its fiscal year 2024 audit to the Cochise County Board of Supervisors on July 22, reporting an unmodified opinion on the county's financial statements while identifying problems the county must fix. The audit presentation, delivered by Financial Audit Manager Terrence Stangel and Deputy Manager Renee Carrasco, covered the annual financial report, an internal-control report, and the federal Single Audit. Stangel said the auditors issued an "unmodified" (clean) opinion on the financial statements dated May 30, 2025, but also reported deficiencies that delayed issuance past statutory deadlines. The audit matters of greatest immediate concern were the timeliness and accuracy of financial reporting, weaknesses in purchasing-card controls, and a lack of documentation at an accommodation school district. Carrasco said the county failed to provide key information on schedule, which led to errors and misclassifications in the initial statements and the county's annual report being issued after the March 31, 2025 statutory deadline. She said the county lacked sufficient independent reviews and detailed policies for financial reporting and recommended assigning second-employee reviews of journal entries, updating policies, and meeting agreed deadlines. On procurement controls, auditors found $43,703 in food and beverage purchases charged to shared travel cards that did not comply with county policy. Auditors said a pilot travel-card program launched in 2022 allowed 25 shared cards to be used without prior approvals, itemized receipts, or training. The county reported it canceled the pilot in February 2024 and concurred with the finding. A third financial-statement finding concerned an accommodation school district that could not produce supporting invoices for $53,638 of tested expenditures; county management reported hiring an experienced business manager in January to address documentation and internal-control weaknesses. Auditors also reported two federal compliance findings related to the county WIC (Special Supplemental Nutrition Program for Women, Infants, and Children) program: Health and Social Services staff failed to obtain signed "rights and obligations" forms for 15 of 62 participants tested, including six initial certifications and nine recertifications. Auditors recommended following state eligibility policies, training staff, and performing clinic-level monitoring; the county concurred and said it had corrected this by March 2025. Stangel and Carrasco said net position increased $29.9 million in FY2024, driven in part by federal and state grant revenue, but noted restricted and nonspendable portions of fund balance and a residual negative unrestricted balance primarily tied to net pension liabilities. The auditors flagged the pension liabilities and reported improvements in funded ratios but advised continued attention. The board accepted the presentation and placed the audit on the consent agenda for approval. The auditors recommended that management provide corrective-action plans and follow up on findings by March 31, 2026.