County auditors give Scotts Bluff County a clean cash-basis opinion, note segregation-of-duties weakness and ARPA spending

Dana Cole & Company presented an independent financial audit of Scotts Bluff County for the fiscal year ended June 30, 2024, concluding the county—inancial statements presented fairly on a cash basis while reporting a material weakness related to segregation of duties.

Kevin Sylvester, partner with Dana Cole, told the Board the audit produced a clean opinion on the county—ash-basis financial statements, meaning the statements "present fairly in all material respects" on a cash basis. Sylvester emphasized the statements are prepared on a cash basis and therefore list cash and fund balances rather than fixed assets or long-term liabilities in the statement of net position.

The audit reported total cash of about $14 million at year end, with roughly $6.6 million restricted and $7.4 million unrestricted. Total disbursements for the year were reported at roughly $39.2 million. Sylvester noted a net decrease in cash of about $5.4 million largely attributable to spending from American Rescue Plan Act (ARPA) funds that the county received in earlier years: approximately $33.3 million of ARPA funds had been expended since receipt.

On internal controls, Sylvester said auditors identified a recurring material weakness (finding 2024-001) tied to insufficient segregation of duties in some county offices. He described the condition common in smaller local governments: a small number of staff sometimes perform multiple accounting functions (authorizing, recording, reconciling) and recommended mitigation through more independent review, cross-training, periodic oversight and, where necessary, additional staffing.

Commissioners questioned long-term debt levels and timing of repayments. Sylvester reviewed debt schedules: long-term debt decreased in the fiscal year as bonds and capital leases were paid down; he cited around $10.9 million in outstanding bonds and leases after payments that included a large payoff related to statewide radio/radio equipment financed via Motorola and reimbursed partly through ARPA. He also discussed capital leases for road graders and notes payable for an aircraft hangar recorded by the county and the arrangement whereby other political subdivisions reimburse the county for shared equipment payments.

On reserves, Sylvester said cash decreased but that much of the change reflected ARPA drawdown, not operating shortfall. He recommended that counties maintain cash reserves of at least four months of operating costs and suggested six months would be preferable in current interest-rate conditions. Commissioners discussed fund-level cash, the county's practice of reviewing disbursements at board meetings and the practical limits of continuous oversight.

Sylvester also described the audit—ommunication and compliance reporting required by government auditing standards and the single-audit "uniform guidance" reporting for federal awards; he reported no instances of reportable noncompliance with major federal programs for the audit year.

Ending: Commissioners accepted the audit report; no formal action was required beyond receipt. The board asked staff to continue to monitor internal controls and report corrective steps for the segregation-of-duties finding.