Fremont County accepts 2023 audit; auditor issues clean opinion, flags lease accounting and IT items

The Fremont County Board of County Commissioners voted 3-0 to accept the county2023 audited financial statements and accompanying management letter at a special meeting on a single agenda item.

Kyle Logan, owner of Logan and Associates, told the commissioners the audit produced an "unmodified opinion. What that means in layman's terms, that's a clean opinion." He summarized the county's financial position, highlighted key balances and reviewed findings from the single-audit compliance work and the management letter.

Logan said Fremont County reported about $90.2 million in total assets at Dec. 31, 2023, an increase of roughly $4.7 million from 2022. Capital assets were about $38.6 million (roughly 43% of assets) and cash and investments totaled about $39.8 million (about 44%). Liabilities were approximately $30.0 million, down about $3.2 million from 2022, primarily from debt paydowns and recognition of previously unspent grant revenue. Net position was about $52.8 million, an increase of about $7.4 million year over year. Logan said the county's unrestricted fund balance was about $20.0 million, which he estimated represented roughly five months of operations.

The auditor reviewed the fund financial statements and reconciling schedules, noting the county presents its general, transportation, human services and sales-and-use tax funds as major funds and combines smaller nonmajor funds for presentation. He also described required disclosures, including a new lease-accounting standard applied in 2023 that led to recognition of long-term lease value tied to airport land leases of about $184,000.

Logan said the county's single-audit work covered three federal programs: the Temporary Assistance for Needy Families (TANF) program with the Department of Human Services, coronavirus state and local recovery funds (ARPA-related), and the Local Assistance and Tribal Consistency Fund (LACTF). He said the county spent more than $10.6 million of federal awards in 2023 and that the single-audit testing produced findings. One finding was a late filing of the federal data-collection form for 2022; Logan said, "if you don't file it on time, you gotta show a finding." Another continuing finding related to early gaps in procurement checks for suspension and debarment on some ARPA-era payments; Logan said those checks are being performed now and were verified for the LACTF testing.

The management letter identified a material weakness tied to lease accounting disclosure (the airport land leases noted above) and contained IT-related recommendations from the audit firm's IT specialist. Logan said the IT recommendations center on implementing and documenting consistent IT policies across departments and elected offices and noted the county has been through a major cybersecurity incident in 2021 followed by staff turnover that contributed to audit delays.

The audit report also discloses two budgetary matters the auditor flagged: the restricted fund and the conservation trust fund exceeded budgeted amounts, and the marijuana fund showed a negative budget (revenues lower than budgeted expenditures). Logan said the disclosures were made to avoid a state auditorletter.

Commissioners expressed appreciation for county finance staff and for Logan's work. Several commissioners noted the audit was late due to the 2021 cybersecurity attack and subsequent staff turnover and reconciliations; Logan said he believes the process improved during 2023 and the county aims to complete 2024's audit on schedule.

The formal motion to accept the audit for the year ended Dec. 31, 2023, was made and the board approved it unanimously (Commissioners Bell, McFaul and Grantham each voted "aye"). Logan thanked county staff by name for their assistance; commissioners said the full audit and management letter will be posted on the county website for public review.

The acceptance carries no immediate new policy changes; next steps noted in the meeting record include the county's corrective-action plan for single-audit findings and continued work to finalize IT and procurement controls.