County auditors issue clean opinion but flag two material weaknesses and multiple compliance findings
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Summary
UHY auditors told the Essex County Board of Supervisors on April 14 that the FY2025 financial statements received a clean, unmodified opinion, but the report cited two material weaknesses in financial reporting and eight APA compliance findings; auditors said management corrected prior-year weaknesses and recommended follow-up testing.
At the April 14 work session, external auditors from UHY presented Essex Countys fiscal 2025 financial-statement audit and issued a clean, unmodified opinion that the countys financial statements are materially presented under generally accepted accounting principles.
Jason Ostrowski, managing director at UHY, opened the presentation by saying, "happy to report a clean, unmodified opinion" on the financial statements and highlighted the audit reports front-page emphasis of a matter related to compensated absences.
The emphasis of the matter reflects recently implemented Governmental Accounting Standards Board guidance that requires recognition of certain accrued sick-leave liabilities on government-wide statements. Ostrowski described the change as a "minor nuance" that increased recognition of accrued leave that had not been recorded under prior presentation rules but did not have a material effect on the overall financial statements.
Bakari Bajaga, the audit senior manager on the engagement, summarized governance communications and audit adjustments, stating that the countys financial-statement disclosures were "neutral, consistent, and clear." He said auditors proposed a small number of adjustments during the audit and that management corrected those adjustments.
But auditors also reported two material weaknesses in internal control over financial reporting and flagged eight APA (auditor of public accounts) compliance findings. Ostrowski told supervisors those issues were partly linked to transition work around a joint administration arrangement and turnover that delayed completion of the audit beyond the statutory date.
Supervisors pressed auditors about follow-up. One board member asked whether the firm could return for interim testing to verify corrective actions sooner than the next audit cycle; auditors said they could incorporate review of prior findings into next years audit planning and that a separate interim engagement to test remediation earlier was feasible. Ostrowski also noted that two material weaknesses reported in the previous year were corrected during the FY2025 audit.
Several supervisors expressed concern about school finance reporting, which the audit singled out for late or inaccurate annual reports and missing documentation. Supervisor McGruder urged staff and the auditors to prioritize early testing and corrective steps "because I hate to wait another 12 months" for resolution and to avoid potential penalties affecting taxpayers.
The presentation closed with auditors noting the report contains required supplementary information (pensions and other postemployment-benefit schedules) on which the auditor does not issue an opinion, and emphasizing that management is responsible for preparing the financial statements and related schedules.
What happens next: auditors said they will incorporate prior findings into planning for the FY2026 audit and can discuss an earlier interim engagement to test remediation. The board asked management to work with auditors on corrective steps for school financial reporting and to provide updates in the coming months.
