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Humboldt County auditors issue qualified opinion; supervisors accept annual audit
Summary
The Humboldt County Board of Supervisors accepted the countys annual audit for the year ended June 30, 2024. Auditors issued a qualified opinion limited to subscription-based IT agreements and lease reporting; the report otherwise found the county in a generally strong financial position and identified internal-control comments.
The Humboldt County Board of Supervisors accepted the countys annual audit for the year ended June 30, 2024, following a presentation by the boards independent auditors.
The auditors issued a qualified opinion limited to two reporting areas: subscription-based information technology agreements (SBITAs) and a lease-reporting standard. Auditor Tim said the county lacked sufficient documentation to record certain long-term subscription or lease arrangements on the government-wide financial statements, so "we did issue qualified opinions" on those items, but otherwise the financial statements "present fairly in all material respects" under U.S. generally accepted accounting principles.
The audit presentation summarized the countys financial position, noting $13,726,028 in cash and cash equivalents and capital assets, net of accumulated depreciation, of $26,444,548. The auditors reported $8,231,850 in succeeding-year property taxes (presented for informational purposes) and identified $1,069,045 in unearned revenue, mainly from opioid settlement receipts and unspent ARPA funds. On a government-wide basis, net position rose from about $33.3 million to $35.9 million during the year, with reported revenues of $15,948,000 and expenses of $13,428,000.
The auditors highlighted several liabilities and estimates readers should note. Outstanding general-obligation bonds and notes totaled approximately $1,662,169 at year end. The countys estimated share of the net pension liability tied to the Iowa Public Employees Retirement System (IPERS) was $1,265,041, and the other postemployment benefits (OPEB) liability for implicit health-insurance obligations was calculated at $309,625. The auditors emphasized these are actuarial estimates that can fluctuate.
The audit report also included a review of fund statements: the general fund closed the year with roughly $4.3 million in cash, total general-fund revenues of $6,830,000 and expenditures of $6,004,000, producing an approximate $826,000 increase in fund balance. The secondary road fund ended the year with a cash balance near $6.4 million but showed larger expenditures before transfers. The drainage districts (28 districts reported) had combined assets and deferred inflows reflecting assessments yet to be collected.
On internal controls and compliance, the auditors identified three reportable findings: (1) segregation of duties limitations common in small governments; (2) financial-reporting adjustments that were required during the audit (accounts receivable, capital-asset adjustments and depreciation entries); and (3) payroll documentation issues, specifically incomplete submission of PTO/time sheets to the auditors office. Tim said adjustments were discussed with county management and a signed management representation letter was received. "I don't want to get anybody excited with respect to the qualified opinion," he added, noting other counties commonly receive similar qualifications tied to SBITAs and lease reporting.
Following the presentation, the board voted to accept the audit report. The motion carried with all members voting in favor.
The auditors indicated the report and supplementary schedules would be submitted to the state auditor's website for public access. The board did not take additional policy action at the meeting beyond accepting the audit; the auditors recommended continued attention to internal-control items and documentation for leases and subscription arrangements moving forward.
