Audit: Marion County receives unmodified opinion on most activities but audit flags budget monitoring and control weaknesses

Brenda Jackson of Ken and Carling Company presented Marion County’s independent auditor’s report and financial statements to the Marion County Council, summarizing key balances and audit findings.

Jackson said the audit produced an unmodified opinion on governmental activities and the county’s major funds but included a disclaimer of opinion for the county’s component unit, the Marion County Library, because the library’s audit was not complete in time to include its audited financial statements. “You have a disclaimer of opinion on the component units of Marion County,” Jackson said.

Jackson reported cash and fund figures: unrestricted cash of about $1,500,000 (down from $3,700,000 the prior year) and restricted cash of about $16,700,000. Total assets were reported at approximately $81,200,000, with fixed assets near $32,200,000. Long-term debt for bonds and leases was about $12,300,000. Jackson also highlighted long-term benefit liabilities: an Other Post-Employment Benefits (OPEB) obligation of about $15,300,000 (as of June 30, 2024) and a pension-related liability reported as approximately $14,700,000, noting those actuarial numbers fluctuate with market assumptions and demographics.

On operating measures, Jackson said the county’s general fund added to fund balance for the year and reported an unassigned fund balance of about $2.6 million of a total fund equity of $3.8 million. Jackson gave the county’s days-of-coverage metric as about 44 days (compared with 29 days the previous year).

The auditor discussed revenue variances that affected the year’s results: tax apportionments exceeded budget by roughly $1 million (attributed to reassessment and better collections), and ARP and FEMA reimbursements materially affected revenue timing. She said revenues were budgeted at about $22.6 million and actual revenue received was approximately $29.2 million for the year.

Audit findings and management-letter observations included: - A material weakness for budget monitoring driven by significant variances between budget and actual that were not adequately addressed; Jackson said the county reduced material weaknesses from two the prior year to one this year but still needs improved budget monitoring. - Significant deficiencies including inadequate segregation of duties (attributable to small staff), incomplete financial-record maintenance in some areas, and continuing needs for stronger grant oversight. - Instances in purchasing where purchase orders were not prepared before purchases or were created after invoices were issued, and some procurements lacked required quotes or bid documentation. - Lease accounting and vehicle-leasing costs: Jackson said required governmental accounting treatment for leases inflated capital outlay reporting; she noted the county’s total vehicle-lease-related payments for the year were about $837,003.80 and that the program has produced persistent over-budget results. - A single-audit noncompliance issue for the FAA Airport Improvement Program: certified payrolls for contractors were not available in the audit sample, and Jackson reminded the council that certified payrolls must be obtained and monitored weekly for federally funded construction work.

Jackson recommended clearer oversight and communication among departments handling grants and reimbursements, tighter purchasing controls (purchase orders and documented quotes/ bids), and formal assignment of someone to oversee reimbursable grant activity.

Council members asked follow-up questions about the library’s audit, the composition of the cash and fee-in-lieu revenue, and the vehicle-lease program’s cost and contract terms. Jackson answered with references to the audit schedules and recommended steps for corrective action.