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County audit issues unmodified opinion but flags internal-control weaknesses and restatement
Summary
An independent audit presented an unmodified (clean) opinion on King William County's 2024 financial statements but identified restatements, several significant deficiencies and material weaknesses in internal controls and a late federal reporting finding.
Jay, the audit partner who presented the county's fiscal 2024 financial statements, told the King William County Board of Supervisors on Jan. 13 that the auditor issued an unmodified opinion, meaning the financial statements are materially correct.
The audit showed the county's primary government net position at about $24.3 million, an increase of roughly $750,000. On a fund-basis, the county's governmental fund balance closed the year at about $15.7 million, down from about $18.9 million the prior year; the auditor attributed much of that change to normal operating variances and capital activity. Jay said general fund revenues were about $47 million and expenditures about $51.5 million, and noted the county contributed $16.4 million to the school system during the fiscal year. The county's long-term debt was reported at about $30.7 million, with roughly $9.9 million of long-term debt tied to the water and sewer enterprise.
Alongside those headline numbers, the auditor listed internal-control deficiencies and compliance issues. Jay described several significant deficiencies involving formal approval procedures for journal entries, accounts receivable recognition (notably in the water and sewer proprietary fund), and interfund transfers. The audit identified material weaknesses in the county's capital-asset accounting for the water and sewer fund and in reconciling investment accounts to the general ledger. The auditor also included a federal-awards finding: the county filed an ARPA-required report one day late, which is treated as a compliance exception.
The audit team explained a restatement related to the classification of certain cash-equivalent accounts in the water and sewer fund's cash-flow statement; that adjustment did not change reported fund balances but altered cash-flow presentation. Jay also noted the water and sewer fund showed a net loss on its statement after transfers out of about $1.3 million to the general and debt funds; excluding those transfers, the enterprise performed better operationally.
Jay told the board the auditors had reported management-letter items about bank reconciliations and a Commonwealth finding tied to the Virginia Procurement Act where documentation for at least one contract did not show required performance and payment provisions.
Jay concluded by saying the finance department had made measurable improvements during the audit process but that stability and institutional knowledge in the department remain important going forward.
The audit report and its schedules, including the findings and the county's proposed follow-up work, will be posted as part of the county's financial materials.
