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Independent audit shows unmodified opinion, cites internal control findings
Summary
Gardner Company issued an unmodified opinion on Mitchell County’s 2025 financial statements but recorded material adjusting entries and findings including segregation of duties and questioned expenditures for finance charges and conservation show prizes; auditors recommended improved documentation and internal controls.
Auditors from Gardner Company presented Mitchell County’s fiscal‑year audit for the year ended June 30, 2025, and issued an unmodified opinion. The auditor told the board that while the overall financial statements are fairly presented, the audit identified material adjusting journal entries for grant proceeds, urban renewal bond activity and capital asset accounting that the county accepted and incorporated into the final statements.
The audit highlighted implementation of Governmental Accounting Standards Board Statement No. 101 on compensated absences (sick‑leave probability calculations), which required a new liability calculation for accrued sick leave. The auditor described the concept as a probability‑based estimate and said county payroll and human resources staff would need to help refine the inputs.
Key findings included recurring comments on segregation of duties (a common finding in smaller governments), adjustments needed to properly record grants and capital assets, and two questioned expenditure items: (1) finance charges paid to a finance company (auditor noted state guidance finds no public purpose for paying finance charges) and (2) purchases for conservation show prizes that lacked documented public‑purpose authorization; auditors recommended documenting donations specifically restricted for those prizes or having a 'friends' group purchase prizes directly.
Auditor recommendation: strengthen segregation of duties where feasible, attach donation documentation to claims packets when donated funds are used to pay event prizes, and ensure transfers and tax‑increment financing forms follow Department of Management templates.
Board response and next steps: Supervisors asked staff to follow up on the questioned items and said they appreciated the audit work. The auditor said the material adjustments were proposed to and accepted by county staff during fieldwork and recommended continued attention to internal control documentation.
