Lake County accepts 2024 audit; auditors report clean opinion but three material weaknesses

Lake County commissioners voted Feb. 23 to accept the countys 2024 audited financial statements after a presentation by auditors from DMC Audit Consulting.

Dimitri Cherniak, owner of DMC Audit Consulting, told the board the firm issued an unmodified—or "clean"—opinion on the 2024 statements, meaning the auditors obtained reasonable assurance that the statements as a whole were free from material misstatement. "We have not found any fraud during this audit," Cherniak said, adding the audit follows generally accepted auditing standards and government auditing standards.

At the same time, auditors identified three material weaknesses and several compliance and control matters related to timing of revenue recognition, grant reporting and subrecipient monitoring, and certain bank accounts that were not recorded in the county accounting system. Cherniak said the repeated issues were principally timing errors: "Sales tax and grants revenues from prior years were just not recorded in the right year," and auditors made correcting entries to record those amounts in the proper fiscal periods.

The audit also noted budget compliance problems in which some funds reported expenditures that exceeded available resources. Cherniak pointed to the public health fund as exceeding available resources by roughly $44,000 and said supplemental budget actions are the usual remedy when outlays exceed appropriations.

On federal-award testing, auditors said they reviewed the countys largest federal programs, including coronavirus state and local fiscal recovery funds; Cherniak identified roughly $1,700,000 of such spending tested as part of the single-audit compliance work. He also said the countys Schedule of Expenditures of Federal Awards (SEFA) had missing grants and recommended centralizing grant-tracking to ensure all federal awards are reported and reconciled timely.

County finance staff and administration described steps already underway. Candace Bridal said the county has instituted an internal review process that requires finance and legal sign-off before applying for grants (with small exceptions) and that grant-tracking and budgeting responsibility will live in the finance office to improve consistency. Staff also described work with Tyler software to build a detailed register to reconcile treasurer records to the countys accounting system.

Cherniak told the board that, because many of the findings relate to 2024 activity, improvements made since then could reduce findings for future audits. He advised that when books and reconciliations are delivered timely (ideally March—April), an audit for an entity this size typically takes 30 to 60 days; county staff said their goal is to have audited results in time to inform the budget process, with a practical target of June—July and a hope of wrapping substantial work by June 30.

After the presentation commissioners moved and seconded a motion to accept the 2024 audit; no roll-call vote was recorded and applause followed. The board closed the special meeting at 2:19 p.m.

What happens next: auditors recommended the county centralize grant management, reconcile the treasurer and accounting records using the Tyler-generated register, and continue quarterly reviews to prevent future budget compliance exceptions. Commissioners and staff said they will use the audit findings as the basis for tightened controls and to improve transparency for future reporting.