Auditors present Caroline County’s fiscal 2024 figures; county shows $17 million net position increase

External auditors presented Caroline County’s fiscal year 2024 audit at the Jan. 21 commissioners meeting and said the audit opinion on the financial statements was unmodified.

The audit team from UHY highlighted an increase in the county’s net position from about $68.1 million at the start of the year to roughly $85.2 million at year‑end, an increase auditors characterized as substantial. Auditors noted several key items: growth in restricted funds, the creation of a cannabis‑related restricted fund, general fund balance equal to about seven months of operating expenses (the Government Finance Officers Association recommends a minimum of two months), and operating income in the county’s proprietary funds that covered depreciation expense.

Why it matters: The auditor’s clean opinion indicates the county’s fiscal statements are free of material misstatement. Commissioners and staff framed the year as strong financially but cautioned that some increases reflect timing or revenue recognition rather than recurring operating gains.

Highlights from the audit presentation - Audit opinion: auditors stated the financial statements were free of material misstatement (an unmodified opinion as shown in the audit report). - Net position: primary government net position reported at about $85.2 million at June 30, 2024, up roughly $17 million from the prior year. - General fund balance: the county’s general fund balance was discussed as approximately seven months of operating expenses, above the GFOA recommended minimum of two months. - Restricted funds: auditors described an increasing number of restricted funds, including new funds related to cannabis tax revenues; commissioners and staff discussed that many state and program grants restrict how revenues may be used. - Pension and OPEB: the county’s net pension liability for its pension plan was presented as about $5.2 million (roughly 86% funded); the county’s participation in the state pension plan showed a liability about 74% funded; the county’s OPEB plan was reported as approximately 142% funded (a net OPEB asset) after long‑term prefunding carried out in prior years. - LOSAP (Length of Service Award Program): auditors reported a LOSAP net liability decrease after a $1.7 million contribution; the plan was described as about 59% funded at year‑end, with ongoing sensitivity to benefit changes (discussion included commissioners’ concerns about potential changes to eligibility age and benefit structure and a suggestion to run actuarial scenarios before adopting changes).

Audit process notes and next steps Auditors said they have completed most of the audit work and were finishing outstanding items such as single‑audit work and a few remaining subsidiary items; they expected to wrap single‑audit items by the end of the month. Auditors also noted a new planning requirement that increased front‑end audit work related to understanding entity environment and risk of material misstatement.

Ending note Commissioners thanked county staff and auditors for completing the audit on time and without a filing extension. No formal action was required of the board on the audit report during the meeting; the audit report was presented for commissioner review.