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King George County audit: clean opinion but auditors report material reporting weakness; fund balances rose
Summary
External auditors issued an unmodified (clean) opinion on the county’s 2024 financial statements but reported a material weakness requiring auditor-recommended adjustments to financial statements; the county’s governmental fund balances increased in FY2024, with unassigned fund balance reported at about $43.6 million.
Auditors presenting King George County’s annual financial report for the year ended June 30, 2024 told supervisors they issued a clean independent auditors’ report on the financial statements, but they did report a material weakness in internal control tied to the need for material auditor adjustments to the statements.
Andrew Grossnickel of the audit firm reviewed the results and explained the county received an unmodified opinion on the financial statements and a separate government-auditing-standards report (the “yellow book” report). He said the county also required a single-audit (Uniform Guidance) because of federal grant thresholds; no material weaknesses were reported for the major federal programs tested.
The nut graf: While auditors judged the county’s financial statements reliable once adjusted, they flagged a recurring material weakness because auditor-identified adjustments were necessary to bring statements into conformity with generally accepted accounting principles. Auditors issued a management letter with recommendations for internal controls that do not rise to the level of a reportable material weakness but merit manager attention.
Auditors provided figures: governmental net position on an accrual basis was about $91.6 million at June 30, 2024 (an increase of roughly $3.1 million from the prior year). On the governmental fund (modified accrual) basis used for budgeting, governmental fund balances were about $103 million (an increase of about $1.8 million). The unassigned portion of the general fund balance was reported at $43.6 million. Grossnickel noted that general fund revenues were about $2.4 million under the final budget while expenditures were held roughly $5.0 million under budget, producing a net favorable variance for the year.
Board members pressed auditors on specific matters flagged in the management letter, including an example of expenditures recorded against a revenue line and a travel reimbursement that appeared inconsistent with county policy. Auditors said those items were atypical and not customary; county staff and the auditor agreed to follow up and provide additional documentation. The auditor offered to meet with supervisors for a further review of items the board wanted investigated.
Supervisor Collins and others urged that training and process changes be continued to remove the material weakness in the next audit cycle. Auditors said improvements had been made since the prior year but not enough to remove the finding for FY2024; they recommended additional training and workflow changes to reduce the likelihood of needing material adjustments in future years.
Ending: County staff and the auditor said they will continue one-on-one training with finance staff and pursue internal-control changes, with the objective of eliminating the material weakness for FY2025.
