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Ulster County auditors outline 2025 year-end plan, flag ARPA testing and two top risks
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Summary
O'Connor Davies presented its 2025 external audit plan to the Ulster County Audit Committee April 21, outlining fieldwork scheduled June 8—June 26, two AICPA-mandated significant risks (improper revenue recognition and management override), and federal single-audit testing of ARPA, TANF and SNAP.
Melissa, a representative of O'Connor Davies LLP, presented the external audit plan for Ulster County's fiscal year ending Dec. 31, 2025, and walked the committee through timelines, deliverables and major audit areas. She said fieldwork is scheduled to start June 8 and conclude June 26, with draft financial statements due no later than Sept. 30, 2026, and a final audit presentation to follow.
The auditors identified two primary, AICPA-mandated risks they will prioritize: "We have 2 significant risks. The first one is improper revenue recognition due to fraud," and a second significant risk is "management override of internal controls of financial reporting," Melissa said, adding the firm will review journal entries and require third-party review of significant entries and greater legislative involvement for material transactions.
The presentation listed key substantive testing areas the auditors will perform, including cash and cash-equivalent confirmations with banks, revenue-recognition and accounts-receivable allowances, tax-receivable reconciliations using parcel-level subsidiary ledgers, accounts-payable and post-year-end accrual testing, fund-balance reserve testing (100% testing for new reserves), government-wide capital assets, bonds payable disclosures and review of third-party actuarial reports for OPEB liabilities.
On federal compliance, the audit firm said Ulster County exceeds the $1,000,000 single-audit threshold and will test compliance for the American Rescue Plan Act (ARPA), the Temporary Assistance for Needy Families (TANF) program, and SNAP. Melissa warned the committee that ARPA oversight is "winding down" and that federal desk audits are occurring, and she noted potential disclosure obligations tied to GASB Statement No. 102 and SNAP administrative-cost changes effective Oct. 1, 2026.
Committee members pressed on several technical points. When asked whether construction-in-progress would be included in property-and-equipment testing, Melissa said significant construction purchases and large material invoices would be selected and tested. On fund balances, a legislator asked whether the new health-insurance fund would be reviewed; Melissa said internal-service funds are evaluated and fund setups and enabling resolutions will be examined for proper authorization.
The committee's controller raised a separate concern about cash receipts: "We actually take property tax payments in cash, and at times that is in excess of $10,000," the controller said, calling that a potential weakness to be addressed in audit procedures.
Next steps the firm outlined include performance of scheduled fieldwork (June 8—26), review of draft financial statements received from county staff between June and August, and a formal audit-results meeting at the conclusion of the process. The auditors asked committee members to identify any additional areas of concern that might warrant further attention during their fieldwork.
