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External auditors report expected 'clean' opinion but flag $6.2 million capital-asset error and time-reporting deficiency
Summary
Tim Lyons, the engagement partner for Buncombe County's external audit, told the audit committee auditors expect to issue unmodified opinions on the financial statements and on compliance but reported a material weakness — roughly $6,200,000 of capital assets attributable to local school systems — and a single-audit significant deficiency involving employee time reporting.
Tim Lyons, the engagement partner overseeing Buncombe County’s audit, told the county’s audit committee that auditors expect to issue unmodified, or “clean,” opinions on the county’s financial statements and on tested federal and state programs but reported two findings the committee must address.
Lyons said the county will receive an unmodified opinion once final quality-control work is finished and the county completes any minor edits to the ACFR. “My name is Tim Lyons, and I do serve as the engagement partner on the county's audit,” Lyons said. He told the committee the firm is in final review and aims to issue the final reports before the end of the month.
The most consequential issue reported is a material-weakness audit adjustment tied to a multi‑jurisdictional solar-panel project. Lyons said auditors removed about $6,200,000 of capital assets that had been carried on the county’s books but “did not belong to the county” and instead are the responsibility of Buncombe County Schools or Asheville City Schools. County staff brought the discrepancy to the auditors’ attention during the review, and the adjustment affected a prior-year beginning net position, which by definition created a reportable material weakness.
County staff confirmed a corrective-action plan will be included in the ACFR. Lyons said a management corrective-action plan is required for findings “whether they're financial statement or single-audit related,” and that plan will be part of the final report.
Auditors also reported a single-audit significant deficiency related to payroll time reporting for federally funded programs. Lyons described the issue as a mismatch between employees’ day sheets and the monthly 1571 reports submitted to the North Carolina Department of Health and Human Services. In the auditor’s sample, Lyons reported discrepancies in 1 of 40 Medicaid records and 2 of 40 foster-care records. He emphasized that the discrepancy “does not mean that the county incorrectly spent federal or state money” or that funds must be returned — rather, it represents a control and documentation gap the county should fix.
Lyons reviewed other required communications and accounting updates: the county implemented two new Governmental Accounting Standards Board pronouncements (GASB 101 and GASB 102) with no material effect on reported amounts, and GASB 103 will change the presentation location of budget-to-actual schedules in the ACFR going forward.
On timing, staff said final quality-control review is occurring this week, with the intention to submit the finalized ACFR to the state by month’s end and to present the final report to the Buncombe County Board of Commissioners at the board’s first meeting in January. The audit committee voted to recommend the board accept the audit based on the material presented at the committee meeting.
Next steps: staff will incorporate the auditors’ suggested edits and include the corrective-action plan in the final ACFR; auditors will finish QC and deliver the final opinion and compliance reports. The committee will bring the recommendation to the full board when the ACFR is final.
