Oakland audit returns clean opinion; auditors flag segregation-of-duties weakness

Auditors presented the Town of Oakland’s fiscal year ending Sept. 30, 2024, with an independent auditor’s report that delivered a clean opinion, meaning the financial statements were "fairly stated in all material respect," the audit partner said. The audit covered the town and reported no material weaknesses or instances of noncompliance, but it did identify one significant deficiency tied to segregation of duties in the town’s finance and customer-service functions.

Tiffany Mangold, the audit partner on the engagement, told the commission the town’s small finance team means "the town doesn't have the resources to properly segregate those duties among employees," and recommended adding oversight so a single person cannot add vendors, write checks, reconcile bank accounts and perform other end-to-end tasks alone. "Even if Gabby cannot… have more of an oversight, like a detection control after the fact, it can be someone in her same department," Mangold said.

The auditors also reported that the town exceeded the $750,000 federal-funding threshold (driven by ARPA funds) and therefore performed an ARPA-focused compliance engagement; they found the town’s ARPA spending to be in compliance. Mangold summarized key financial highlights: total general-fund revenues of about $9.3 million for the year (up roughly $1.1 million from the prior year), a $1.1 million increase in fund balance, and an unassigned fund-balance ratio near 37% of current expenditures — above the Government Finance Officers Association guideline cited in the presentation.

Commissioners pressed staff about next steps. The commission said it has begun adding oversight layers in response: staff reported adding additional reviewers to bank reconciliations and that an assistant has been assigned to help the finance director. After the presentation and questions, the commission moved and voted to accept the audit report.

The audit packet included a note about the Oakland Avenue Charter School financials, which were included in the town-bound financial statements but audited by a different auditor; auditors flagged that as a presentation item that will appear differently in next year’s report. The audit partner also recommended that the town continue to work on due-tos and froms between funds and remove disposed capital assets from the accounting system in a timely way.

What happens next: staff said they are already implementing additional oversight procedures and will continue coordinating with the auditors. The commission accepted the audit during the meeting, and management will follow up on the segregation-of-duties recommendations ahead of next year’s audit.