Audit committee hears SB & Company report clean FY25 audit for Montgomery County

At a meeting of Montgomery Countys audit committee, auditors from SB & Company reported unmodified (clean) opinions on the countys FY25 financial statements and related retirement and trust statements, and said they found no material weaknesses in internal control over financial reporting.

"We issued unmodified or, if you will, clean opinions on all of the financial statements," said Bill Seymour, SB & Companys engagement partner. "We did not discover any instances of fraud." Seymour added that the firms work is not a forensic fraud audit and that the comment applies to areas the auditors tested.

Seymour outlined the firms scope: the countys financial statements, a uniform guidance single audit of federal grants, an audit of the 9-1-1 program, agreed-upon procedures for landfill and National Transit Database requirements, and audits of employee retirement systems, a deferred compensation plan and the consolidated retiree health benefit trust. He said auditors tested six major programs accounting for just under $120,000,000 in expenditures; total federal awards were just over $230,000,000, producing roughly 52% coverage for federal-program testing.

Karen Hawkins, chief operating officer in the county finance department, introduced staff leaders who manage the Comprehensive Annual Financial Report and said continuity in the audit team has improved efficiency. "They come back with a knowledge first of all; they have a very knowledgeable team in government accounting and auditing," she said.

Seymour said the audit team reviewed controls using the COSO model and assessed key process-level controls (treasury, payroll, revenue, expenditures, fixed assets, grant compliance and the financial-reporting aspects of IT) as effective for purposes of the financial-statement audit. He cautioned that the audits IT procedures are limited to financial-reporting controls and are not a full-scope cybersecurity review. "Identity theft, information theft is the new way that bank robberies occur...it is not a matter of if, it's more of a matter of when," he said, urging continued diligence in IT processes.

The auditor also said there were no disagreements with management, no audit journal entries that required reporting to the committee, and no consultations with other accountants. Based on the single-audit testing and the absence of material findings, Seymour said the county continues to qualify as a low-risk auditee under federal standards.

The committees chair and members asked clarifying questions about potential recommendations and the limits of the audits IT review; Seymour reiterated that recommendations were limited to housekeeping or process improvements and that serious IT work would require a separate, deeper engagement.

The committee will receive additional reports from the countys inspector general at a follow-up meeting expected after the budget in June.