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County auditors report unmodified FY24 opinion, flag recurring segregation-of-duties weakness
Summary
Auditors presented an unmodified (clean) opinion on Anaconda Deer Lodge County's FY24 financial statements but reported one recurring internal-control finding: limited segregation of duties in smaller county offices and a recommendation to consider a software module to reduce risk.
Debbie O'Ladd, a CPA with the auditing firm that covered Anaconda Deer Lodge County's fiscal year 2024, told commissioners the auditors issued an unmodified opinion on the county's financial statements and the related single-audit work.
The opinion indicates the auditors concluded the statements were fairly presented in accordance with generally accepted accounting principles applicable to governments, O'Ladd said, adding that a clean opinion is the result county officials should expect.
Why it matters: An unmodified opinion is the standard positive outcome for an audit and means the auditors found no material misstatements in the financial statements. At the same time, O'Ladd said the single-audit review and internal-control work produced one recurring finding: inadequate segregation of duties in small departments.
O'Ladd explained auditors test cash reconciliations, revenue and expenditure samples, payroll and contract compliance, and federal-program requirements. She said the county met the thresholds requiring a financial audit and a single audit (the county reported roughly $3.2 million in federal assistance for the fiscal year, placing some federal programs within single-audit scope).
On the internal-control finding, O'Ladd said smaller offices often lack the staffing to separate collection, custody and recording functions. "Somebody should be collecting. Somebody should be depositing. Somebody should be recording," she said, noting that the county has seen prior recommendations implemented but that segregation of duties remains a common issue.
Commissioners asked about mitigation options and costs. O'Ladd pointed to a receiving/cash module available for the county's financial software that could reduce risk by automating certain controls and limiting single-person access to critical steps. Commissioners asked staff to follow up with implementation options and cost estimates.
The auditors also noted the county used an accounting system that generates the financial statements and that management's discussion and analysis in the audit binder is not itself audited but is provided as required supplementary information.
Next steps: County staff and finance will evaluate the software/module option and report back to the commission; no formal action or ordinance resulted directly from the audit presentation.
