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County auditors give Flathead an unmodified FY25 opinion but flag $154,000 issue in sheriff's inmate/commissary accounts
Summary
Nexus CPA Group issued an unmodified opinion on Flathead County's FY25 financial statements and federal single-audit but disclosed a significant deficiency in the sheriff's office related to inmate trust/commissary reconciliations, including a May 2025 overdraft and an estimated unfunded liability of about $154,000 dating to 2002; auditors recommended formalized monthly reconciliations and procedural changes.
Flathead County's FY25 financial statements received an unmodified audit opinion, but independent auditors disclosed a significant control deficiency in the sheriff's office's inmate/commissary accounts that will require corrective action, county finance staff and the sheriff told commissioners on Dec. 9.
Jonathan Mart of Nexus CPA Group presented the audit results and said the firm issued an unmodified opinion on the county's financial statements and on the federal single-audit programs tested. "In our opinion the financial statements present fairly in all material respects," Mart told the board.
However, auditors identified four related findings in the sheriff's inmate accounts: month-end reconciliations were not being performed on a strict monthly cutoff, commissary profits were not being reconciled and transferred timely, the inmate account experienced an overdraft in May 2025, and the inmate-worker program had an estimated unfunded liability of about $154,000 based on records back to 2002.
"That amount will eventually need to be provided from the sheriff's fund into the inmate account," Mart said. Auditors recommended: (1) set a fixed month-end cutoff for reconciliations; (2) reconcile commissary profits monthly and transfer them to the proper county accounts; (3) formalize disbursement and check procedures; and (4) develop procedures for funding and accounting for inmate-worker payments so balances exist before disbursements are made.
Sheriff's officials and finance staff told commissioners the overdraft appears to stem from long-standing vendor and procedural issues, not suspected criminal activity, and that most corrective actions have already been initiated. Finance director Amy Dexter said the county will work with the sheriff's office to reconcile accounts and determine the precise amounts that must be transferred and corrected; she estimated the reconciliation process could take a couple of months.
What to watch: Commissioners asked for ongoing updates, and auditors said they would share workpapers to help speed the reconciliation. The $154,000 estimate is an aggregated, historical calculation auditors said will need detailed reconciliation by county staff and the sheriff's office before final accounting adjustments are posted.
Context: Auditors also reviewed major federal programs (Highway Planning Construction grant, ARPA, and rural transit formula grants) and found no compliance issues on those major programs.
