Nueces County hears forensic audit findings; officials seek written responses before further action

NUECES COUNTY, Texas — External auditors presented the commissioner's court on Jan. 28 with draft forensic reports that identified accounting and management weaknesses in the county's health insurance fund and in the auditor's office.

Ben Kinkade, partner at Carr, Riggs & Ingram, told the court the firm examined finances from fiscal years 2020 through 2024 and identified several findings, including a lack of transparency in reported fund performance, improper placement of certain revenues on general fund books rather than the health insurance fund, and missing year-end accruals. Kinkade said those issues contributed to the deficits the fund experienced and that there was approximately $450,000–$500,000 of deferred revenue not reflected on the fund's books.

"We found that the auditor's office under the previous leadership was mismanaged, to the extent that it was not functioning as an auditor's office," Kinkade said during his presentation.

Commissioners asked whether the items were new. Several said the court had previously received similar findings and wanted to see what had been implemented. County staff and the current administration said they have already begun addressing high-priority items and are preparing formal, written management responses to each audit finding.

"All of the high-priority items have been addressed and some of the medium- and low-priority items are in progress," the county's representative said, noting responses will be posted and returned to the court for review. The court asked that staff present each finding alongside the county's response and an implementation timeline at an upcoming meeting.

County officials repeatedly told the public there is no evidence in the report of criminal activity and that changes in staffing and controls are intended to prevent recurrence. "There's never any money missing," one commissioner said, summarizing the county's position that the forensic audit identified procedural and policy shortcomings rather than theft.

The audit materials are in draft form and the presenters said they are pending management responses. County staff said the responses will be circulated to commissioners and presented at a later session with status updates on implementation.

What happens next: the county said it will circulate written management responses to the audit findings and then present the responses and implementation plan to the commissioner's court for tracking and public record.