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External auditors outline 2025 audit plan, single-audit selection, and GASB changes
Summary
Crossland auditors presented the engagement team, risk-based methodology, single-audit major-program selection rules (including 20% low-risk coverage), GASB 101 reporting impacts, and a December timeline for draft review; auditors noted staff changes and how they adjust risk and testing.
John Cross, principal with Crossland, presented the firm's 2025 audit plan and timeline to the Audit Committee. He described the engagement team, recent staffing changes, and the firm's responsibilities: to express opinions on financial statements prepared under management's oversight and to report material weaknesses, significant deficiencies or fraud findings.
Cross explained the firm’s fraud-risk approach and how the single audit (Uniform Guidance) requires sampling of major programs. He walked the committee through the mechanics: Metro is considered a low-risk auditee and therefore Crossland will cover a minimum of 20% of total federal expenditures (the threshold rises to 40% if an auditee is high risk). Cross described how Type A and Type B major-program thresholds are calculated (discussion referenced the $750,000 and $3,000,000 figures depending on total expenditures).
Cross also noted GASB statement changes that will affect reporting (GASB 101, including compensated-absence reporting) and said the audit team is adjusting work programs accordingly. The auditors reported they are already in fieldwork (third week into fieldwork at the time of the meeting) and expect deliverables and the draft reporting timeline to align with the committee's December meetings (a draft/executive-session review followed by a public acceptance meeting).
Committee members asked about experience of new audit managers on the hospital engagement, how Crossland compensates for staffing transitions in risk assessment and testing, and how the CAFR (Comprehensive Annual Financial Report) and CIFA (federal expenditures schedule) are prepared and provided to auditors. Crossland described their approach to control testing vs substantive testing and offered to provide summary materials on single-audit selection and risk mechanics to the committee.
