County audit shows healthy general fund, flags lease/IT reporting and recommends budget amendments
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
An independent auditor delivered a largely positive report for the year ending 06/30/2025 while issuing a qualified opinion tied to subscription-based IT and lease accounting; the audit noted roughly $1.19 million in ARPA spending that triggered a compliance engagement but found no noncompliance.
An independent auditor presented Humboldt County’s fiscal year 2025 financial audit and told the Board of Supervisors the county’s general fund balance rose during the year but that a narrow accounting issue produced a qualified opinion.
"In our opinion, except for that matter that I just explained to you, the financial statements . . . present fairly in all material respects," the auditor (speaker 11) said, describing a qualification tied to how subscription-based technology and certain leasing transactions were recorded.
The auditor reported a general fund increase of about $1,886,006 and said the general fund ended the year with a cash balance of roughly $5.3 million. The audit noted declines in some funds — the rural services fund and secondary roads, for example — and explained that capital spending by the secondary roads fund can make modified-accrual statements show temporary decreases even when long-term assets were acquired.
The report also listed a number of internal-control observations: segregation-of-duties weaknesses typical for small governments, material adjustments made to receivables and capital-asset records at year-end, and a long-standing payroll/accrued-leave issue for which the county has purchased software.
The auditor told the board the county spent $1,192,006.62 in federal dollars during the year (a mix of ARPA and FEMA funding). Because federal spending exceeded $750,000, the county required a compliance engagement; the auditor said that engagement did not find noncompliance with ARPA spending rules.
On the budget front, the auditor noted the county exceeded budgeted limits in several functional areas and recommended the board amend the budget where the Code of Iowa requires it. "You should amend your budget, prior to allowing any expenditures to go over what was originally budgeted," the auditor said.
The auditor said the audit package, plus the separate compliance engagement, will be submitted to the state auditor’s office and posted on the state’s website. Supervisors heard the findings and took no immediate action beyond accepting the report for filing.
What happens next: county staff will receive the auditor’s letter and supplementary schedules, follow up on recommended budget amendments where appropriate and ensure the compliance engagement is filed with state auditors.