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Legislative auditors report two internal‑control deficiencies, late annual report filing noted
Summary
Legislative auditors told the Clay County Board of Commissioners they found two significant internal‑control deficiencies—cash reconciliation and financial reporting adjustments—and notified the board that the 2022 annual financial report was filed late, in apparent noncompliance with state filing requirements.
David Weidler, representing the Department of Legislative Audit, presented the audit closing conference and management letter for the county and identified two significant internal‑control deficiencies and several reporting items the audit team considered important for the board to know.
Weidler told commissioners the auditor’s work found cash reconciliation practices that did not reconcile county cash balances reliably to the general ledger and noted a bond account (Series 2023 bonds) had not been included in the treasurer’s reconciliation records; auditors recommended that the county ensure the bond account is properly reflected in treasurer and auditor records. He said the reconciled cash in the county records was within $26 of the auditor’s reconciled amount as of 12/31/2023 after adjustments, but the audit team remains concerned about the reconciliation process and recommended addressing the underlying reconciliation method.
The second notable finding concerned financial reporting: auditors required 25 adjustments to the county’s 2023 financial statements for proper presentation under generally accepted accounting principles. Weidler characterized these adjustments as part of reporting and presentation issues rather than daily operational errors and recommended focusing on improved processes for financial statement preparation.
Weidler also reported a material violation of state law (identified verbally during the meeting as statute “7‑10‑4”) because the county’s 2022 annual financial report was not filed with the Department of Legislative Audit by the statutory March filing deadline; at the time of the conference the 2022 report had been filed late (the presenter said it was filed in September) and, as far as he knew, had not been published. County staff acknowledged the late filing and said they would investigate publication and follow up on how to proceed.
The auditors’ management letter also called out four county commission minutes that had not been published in the legal newspapers as required and other lesser departmental items that auditors communicated directly to department heads. Weidler offered to remain available to answer questions and said some counties choose to remediate old period reconciliations while others prefer to begin clean close‑forward reconciliations when new financial software is implemented; county staff stated a new software implementation was imminent and preferred to begin with reconciliations in the new system.
Commissioners asked clarifying questions about the findings and the auditor said that similar issues appear in other counties and that the items flagged—while important—were not uncommon. The board accepted the audit communications and voted to authorize the chair to sign the representation letters the auditors requested. Auditors said they would secure a signed management representation before leaving that day.
