County auditor issues clean opinion but flags control and reporting gaps in FY2024-25 audit
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Summary
Gardner Company presented an unmodified opinion on Chickasaw County’s FY2024-25 financial statements but reported material adjusting entries, recurring segregation-of-duties weaknesses, a missing public hearing on a sheriff’s installment purchase, and ARPA compliance procedures for $514,000 in expenditures.
Elizabeth Feier, a CPA with Gardner Company, told the Chickasaw County Board of Supervisors on Feb. 23 that the auditors issued an unmodified opinion for the fiscal year ended June 30, 2025, meaning the financial statements were, in their view, fairly presented after proposed adjustments were recorded.
Feier said the audit required several material adjusting journal entries that the county made to correct items that were either not recorded or recorded improperly. She highlighted the implementation of the Governmental Accounting Standards Board guidance on compensated absences (GASB Statement 101), which changed how the county measures sick leave and comp time by separating current and long‑term components of the liability. "We have issued an unmodified opinion on the financial statements," Feier said. "We did have some material adjustments that were proposed, based on transactions that we found that either were not recorded or not recorded properly."
Why it matters: The unmodified opinion is the outcome officials want, but the auditor’s findings point to recurring operational risks. Feier identified segregation‑of‑duties limitations—common for small county offices—where one person may handle a transaction from start to finish. She also described reporting issues the auditors found during testing, including accounts receivable, deferred inflows, accounts payable, infrastructure construction‑in‑progress and an installment purchase that had not been properly recorded in the county’s financial statements.
The audit’s statutory compliance testing disclosed one procedural lapse: a sheriff’s office installment purchase of equipment was authorized without the public hearing required for a long‑term obligation under the Code of Iowa. Feier said that omission failed to meet the notice and hearing requirements for entering a multi‑year obligation.
On federal funds, Feier reported that the county spent $514,000 of American Rescue Plan Act money during the year. The single‑audit threshold is $750,000 of federal expenditures; because ARPA spending had special provisions the county qualified for an alternative compliance and examination engagement rather than a full single audit. Additional procedures were performed on ARPA spending, and the county will need to file the federal reporting required for those funds.
Board response and next steps: Supervisors asked clarifying questions about the sick‑leave estimate and how the GASB change will be handled going forward. Feier said the liability is an estimate that will be revisited annually and that the county’s policy (which does not pay all sick leave at termination) affects how much is ultimately recognized. The board also heard recommendations to maintain stronger segregation controls where feasible and to ensure required public hearings are held before authorizing noncurrent obligations.
The audit report and the auditor’s internal control and compliance findings were accepted by the board; staff will circulate the final report and follow up on the findings and required filings.
