County auditor’s contractor issues clean opinions, flags subrecipient monitoring and P‑card documentation gaps

Bill Seymour, the engagement partner for SB and Company, told the Anne Arundel County Council on April 15 that the firm issued “an unmodified or clean opinion on the financial statements” and unmodified opinions on related reports including the OPEB trust and the 9‑1‑1 revenues and expenditures schedule.

The report covers the June 30, 2024, financial statements and the Uniform Guidance Single Audit required for entities that receive more than $750,000 in federal awards. Seymour said total federal awards were about $43,000,000 and the auditors tested roughly 60 percent — approximately $26,000,000 — of that amount during the single audit. He told the council the county did not qualify as a low‑risk auditee for 2024 because of a prior year do‑not‑comply finding related to subrecipient monitoring, but that “those items were largely corrected in the current year.”

Why it matters: an unmodified opinion indicates auditors believe the county’s financial statements are presented fairly in accordance with accounting standards. At the same time, shortcomings in grant administration or documentation can expose the county to federal compliance risk and possible disallowed costs.

Seymour said the audit produced no instances of detected fraud under the procedures performed and no material weaknesses in internal control, but it did identify four significant deficiencies and other findings and recommendations. The single‑audit findings focused on subrecipient monitoring: four agreements sampled were missing required federal assistance identification information used to determine whether a subrecipient must themselves obtain a single audit. In grants testing SB and Company also found a small number (3 of 40) of missing invoices tied to P‑card transactions that auditors could not substantiate in the sampling.

Seymour described P‑card documentation as a recurring practical issue: “P cards are a blessing and a curse…if we were seeing 25 out of 25 or 40 out of 40, that would be a sign that there is a problem…A lower percentage is kind of what happens unfortunately.” The auditors noted one instance in the 9‑1‑1 schedule (1 of 25 selections) where an invoice/receipt could not be produced and professional standards require reporting of unsupported transactions.

SB and Company also reviewed the county’s local community grant processes. Auditors observed that while the county has a template grant agreement, not all departments used it and monitoring procedures varied by department. Seymour said those inconsistencies are observations (best‑practice recommendations) but also listed findings where a grant agreement was missing, an invoice lacked approval, or funding amounts differed from the signed agreement. He noted one grant that was advanced 100 percent even though the agreement called for reimbursement — a practice that can increase risk when recipients are required to spend before documentation is reviewed.

The auditors thanked county staff for cooperation and named Billy Penley and Kevin McMahon specifically; Seymour said two prior year findings were cleared, one was near implementation and seven remained under active work. He said the grants agreed‑upon procedures report is in draft and one procedure is still being finalized.

Council members asked about how widespread the template non‑use was; Seymour replied the two‑department sample they found using a different template reflected testing scope: “Of the ones that we tested.” Council members pressed about whether missing P‑card receipts clustered in particular departments; auditors said the missing receipts were “spread across” departments.

The county auditor and SB and Company told the council they will continue follow up on remaining items and provide separate reporting on implementation of recommendations.