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Auditors report no major federal compliance failures but flag health department bonus process as internal-control deficiency
Summary
James Gordon & Associates presented Riley County’s 2023 financial audit on Jan. 16, reporting an unmodified opinion under the regulatory basis and noting a significant internal-control deficiency tied to bonus payments at the county health department.
Auditors presented the county’s financial audit for the year ending Dec. 31, 2023, on Jan. 16, telling commissioners the report carried an unmodified opinion under the regulatory basis and an adverse opinion under GAAP, consistent with prior years for the county. The auditors reported no material weaknesses in internal control but identified a significant deficiency in the county’s payroll and approval process for bonus payments made by the health department.
Jacob Kuioff of James Gordon & Associates told the commission the firm worked with county staff and that most audit adjustments involved agency funds and accounts payable entries that auditors had to record for the financial statements. Kuioff said the county’s cash position increased by roughly $6 million in 2023, driven largely by capital improvement receipts and other funds.
The audit identified a single financial-statement finding related to bonuses the health department paid outside the county’s standard payroll approval processes. After discussions with the Kansas Department of Health and Environment (KDHE), auditors concluded the bonus payments were allowable under the grant but that county internal-control procedures had been circumvented. Because KDHE accepted the costs, auditors classified the issue as a significant deficiency rather than questioned grant costs; county staff are working to reissue W-2s and address withheld-tax shortfalls that resulted from the bonus payments.
Kuioff noted one small budget violation in the Hunters Island Water District fund and a minor cash violation in the returned-check fund; auditors termed both minimal. For federal-award reporting, the county’s major programs audited this year included WIC and ARPA funds; auditors said there were no material weaknesses or questioned costs for major federal programs.
Commissioners asked for clarification on timelines; courtroom and audit timetable matters were discussed, and the auditors said they expect the 2024 audit to be completed more quickly. Commissioners thanked county finance staff for their work compiling records and coordinating with auditors.
Ending: Commissioners heard the audit presentation, asked staff to correct any clerical errors in public reports and directed follow-up actions on the payroll-withholding issue and other audit recommendations.
