Bladen County audit: unmodified opinion on financial statements; federal Medicaid awards show material weaknesses

An auditor presenting to the Bladen County Board of Commissioners at its March meeting said the countyreceived an unmodified opinion on its 2024 financial statements but that the countyhad material weaknesses and noncompliance findings related to federal awards tied to Medicaid.

The auditor, identified in the meeting only as a representative of the audit firm, told commissioners the audit opinion was unmodified, meaning the firm concluded the countyfinancial statements were materially correct. "Itis an unmodified opinion ... which is the highest opinion we render," the firm representative said.

Why it matters: an unmodified opinion indicates the countyfinancial statements present information fairly in accordance with accounting standards, while federal findings on Medicaid can affect future grant compliance and require corrective action by the Department of Social Services (DSS).

The auditor said there were no material weaknesses, significant deficiencies or noncompliance in the countyfinancial statements. The firm did report material weaknesses and noncompliance in the countyfederal awards, specifically in Medicaid-related testing, and provided details and a corrective action plan the countyDSS has begun implementing. "The federal awards did have some material weaknesses and some non compliance and that deals with the Medicaid," the auditor said, and pointed commissioners to the detailed findings and the corrective action plan included in the audit packet.

The auditor also discussed reporting and timing. The audit was late relative to the countytimeline: it was due Oct. 31 but completed Dec. 15 because of scheduling and timing of information; the auditor said the stateLocal Government Commission has adjusted future due dates to Dec. 31. The auditor also noted a presentation change required by new accounting guidance for opioid settlements; that change affects presentation only, not the underlying numbers.

Key figures and highlights presented by the auditor: - Cash across county funds: approximately $45,000,000, with about $2.2 million restricted in the general fund. - General fund ended with a surplus of about $1,700,000 for the year reported. - The countyfund balance decreased from a spike in 2023 (driven by revenue replacement funds) to roughly 70% on the Local Government Commission indicator. The auditor characterized this as the fund balance returning to more typical, pre-ARPA levels. - Water fund: GAAP surplus of $246,000 (budgeted-accounting surplus reported as $421,000). - Solid waste fund: GAAP deficit of $659,000; budgeted plan anticipated a $1,000,000 draw from surplus for 2024. - Ad valorem (property) tax collections grew by about $695,000 to just over $27,000,000; local option sales tax collections have risen over the past five years.

The auditor said management had made the recommended adjustments and that there were no unresolved disagreements with management. The auditor praised county staff, singling out "Lisa" and the county manager, "Ms. Peterson," for cooperation during the audit process and noting staff have been responsive to recommended changes.

Commissioners did not debate the audit findings at length at the meeting. A motion to accept the audit presentation as provided was made and approved by voice vote; the meeting record shows the board voted "aye." The auditor closed by offering further availability for any commissioner or staff questions.

Next steps noted in the presentation include DSS implementing the corrective action plan for the Medicaid findings and county staff preparing responses to the Local Government Commission financial indicator notices. The auditor said staff training and procedural changes were underway at DSS to address compliance issues.

The audit report, detailed schedules and the auditor's presentation slides were provided to the board and included in the meeting packet.