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Auditors give Surry County a clean opinion but flag a material weakness and a compliance lapse
Summary
Kilian CPA Group reported a clean (unmodified) opinion on Surry County—Y25 financial statements, but told commissioners it identified one material weakness in internal control and one instance of expenditures in excess of appropriations in the landfill fund; auditors also described prior-period errors corrected in FY25.
Kilian CPA Group auditor Travis Keever told the Surry County Board of Commissioners on March 16 that the firm issued an unmodified (clean) opinion on the county's FY25 financial statements but also identified internal control problems that the board should address.
"We issued an unmodified or a clean opinion on the county's financial statements," said Travis Keever of Kilian CPA Group. He said auditors also reported "one material weakness in internal control and one instance of material noncompliance with laws and regulations," citing a budgetary violation in the landfill fund where capital outlay was not budgeted for a financed equipment purchase.
Keever gave several numerical highlights from the audit: the county's combined assets are "just shy of $87,000,000," total revenues were about $119,000,000 and total expenditures about $121,000,000 for FY25. He said auditor testing identified prior-period errors that required correction: roughly $630,000 in accounts receivable not recorded at June 30, 2024, and about $1,400,000 of capital outlay miscoded as general fund expense instead of capital project. Those corrections, Keever said, contributed to the material weakness determination.
On grant compliance and the single-audit work, Keever said the firm issued clean opinions for major programs but noted a significant deficiency related to the state foster care fund where four of 42 DSS 5120 eligibility forms were missing required supervisor signatures and two lacked social worker signatures or dates. Keever said the finding was "technical" and did not affect eligibility for foster care services.
Keever also reviewed county financial indicators, reporting an available fund balance near 45% of net expenditures (a level the Local Government Commission considers healthy for counties this size). He observed the landfill enterprise fund had less than one month of working capital and an unrestricted net deficit of about $7.7 million, with an operating loss near $600,000; the airport showed ongoing operating losses offset by grant-funded capital improvements.
The auditor took questions from commissioners and said the department-level issues and documentation lapses should be addressed to strengthen internal controls. The board received the presentation and did not take immediate action beyond acknowledging the audit report.
