Fort Thomas audit flags $322,000 cash discrepancy; auditors issue qualified opinion and recommend tighter controls

An independent audit of Fort Thomas's financial statements for the year ending June 30, 2024, found significant accounting problems that prompted auditors to issue a qualified opinion and recommend multiple internal-control improvements.

John Chamberlain, a partner at Chamberlain Owen and Company, told the Fort Thomas council and finance committee on Sept. 30 that auditors discovered multiple red flags during fieldwork that began in January 2025, including an unreconciled general-fund cash balance that auditors and staff ultimately treated as a prior-period error. "We noticed it was $11,000,000 off," Chamberlain said, summarizing the initial fund-balance discrepancies auditors encountered. He said the year-end financial statements required a prior-period adjustment of about $1,150,000 and the write-off of approximately $322,000 that could not be reconciled to the general-fund cash balance.

The prior-period adjustment recognized previously unrecorded items, including amounts related to federal American Rescue Plan Act (ARPA) receipts and an $850,000 development receivable the city had paid but not recorded. Chamberlain said those steps, together with work by temporary finance director Linda Chapman, allowed the auditors to complete their work but required a qualified opinion limited to the cash account. "That $322,000 in an accounting term, we'd say that's unaccounted for," Chamberlain said. He added, "We have no reason to believe it's been misappropriated," but characterized the condition as a serious accounting…