Supervisors demand corrective action after UHY audit finds pre-2023 record and control gaps

Northumberland County, Virginia — The Northumberland County Board of Supervisors on Jan. 23 received an audit and recommendations from UHY advisors that identified weak record retention, limited segregation of duties, and procurement control failures affecting county and school finances for fiscal years 2019–2023. The board voted to require a corrective action plan and approved new directions on grant notifications and paying overspent category charges.

The audit, presented by Jack Regan and a colleague identified in the presentation as Heather, covered payroll, time and attendance, procurement, accounts payable, purchasing-card activity, treasury and revenue management and the schools’ grant accounting from 2019 through 2023. "There is a gulf… a difference between stuff we found pre fiscal year '23 and post fiscal year '23," Jack Regan said, citing improved documentation and processes beginning in fiscal 2023.

Why it matters: The auditors told the board that missing or disorganized documentation for earlier years limited their ability to test transactions and reach firm conclusions about whether improper activity occurred. Regan said the firm "could not conclude one way or the other" on allegations of fraud, waste or abuse because supporting records for 2019–2022 were incomplete or not located. The board directed immediate follow-up steps to reduce future operational and fiduciary risk.

Key findings and recommendations

- Record retention and documentation: Auditors reported large amounts of older paper records for school operations (described during the presentation as roughly "10 bankers boxes") that were not organized for sampling. The lack of organized supporting documentation restricted audit testing for 2019–2022.

- Segregation of duties and succession planning: UHY flagged that in a small county many employees hold multiple, potentially incompatible duties and urged succession plans plus compensating oversight. "If someone gets hit by a snowplow, you're in trouble," Regan said, describing the county’s dependence on long‑tenured staff.

- Procurement and purchase orders: The report found purchase orders often missing, purchase approvals not consistently documented, and fixed assets without documented board approvals. Automated warnings in the county accounting system were described as informational only — they did not prevent overspending and could be overridden without routed approvals.

- Grant accounting (ESSER/fund 5): Auditors found federal grant funds (identified in the presentation as ESSER and shown in the report as "fund 5" activity) that were not always reflected in school budget presentations to the board, complicating apples‑to‑apples budget comparisons and oversight.

Board directions and formal actions

- Corrective action plan: The board voted to require a written corrective action plan covering all county agencies. The chair asked County staff member Mr. Tadlock to coordinate the plan with school leadership (referenced in the meeting as Dr. Wargo) and return it at the board’s next meeting. The board set Feb. 13, 2025, as the deadline and approved the motion by voice vote.

- Grants notification: The board approved a motion directing that supervisors be informed when an agency begins the grant process and be given the grant’s timeline for receipt and planned spending. The motion was phrased in the meeting as a requirement that agencies "shall" notify the board; members approved it by voice vote.

- Overspent category holds: The board approved a motion to withhold payment of items that would cause a categorical budget to be overspent, with caveats discussed in open session about payroll. Board members and county staff agreed that payroll exceptions would be handled carefully — the treasurer’s office would consult with the county administrator before withholding employee pay.

What auditors said they could and could not conclude

UHY emphasized that improved bookkeeping and staffing in 2023 materially increased the availability and quality of records for testing. Regan told the board the firm was able to test more recent transactions but could not render firm opinions for older years because required supporting documentation either "was not final," "could not be located in one pass or two," or may not have been provided. He said the recommendations in the report are practical and actionable and were developed after interviews and repeated requests to staff.

Next steps and implementation details

Board members instructed the county administrator and relevant staff to deliver a corrective action plan that lists each finding, proposed steps, responsible official or position, and date of implementation. Supervisors also scheduled a joint finance meeting for Feb. 5 and said the corrective action plan should be tracked as part of ongoing monthly reporting to the board.

The auditors and multiple county and school officials acknowledged improvement since 2023, while also urging the county to consider targeted IT and workflow investments (modules for the current RDA system were discussed) and stronger monthly reconciliation and reporting so supervisors can exercise regular oversight.

Ending

The meeting record shows the board convened a closed session under the Virginia Freedom of Information Act before the audit presentation; after returning to open session, the board certified the closed session by roll call. Supervisors said they expect the corrective action plan and monthly monitoring steps to be returned at the Feb. 13 board meeting and to be applied across all county agencies, including the school system.