Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Audit Governance topic
No spam. Unsubscribe anytime.
New external auditors report clean financial-statement opinions but list four material weaknesses in Durham's FY2025 audit
Summary
External auditor Leanne Bagasala of Malden(s)/Maldens and Jenkins reported unmodified opinions on Durham County's FY2025 financial statements and federal/state single-audit reports, and identified four material weaknesses that management has largely corrected or for which corrective action is underway.
At the April 27 Durham Board of County Commissioners meeting, Malden(s)/Maldens and Jenkins engagement partner Leanne Bagasala presented the county's FY2025 annual financial audit and single-audit results.
Bagasala told the board the auditors issued unmodified (clean) opinions on the county's basic financial statements and on the federal and state single-audit reports. She said the firm performed the work in accordance with generally accepted auditing standards and government auditing standards and that the financial-statement opinion represents management's responsibility complemented by the auditors' reasonable-assurance work.
The audit report identified four material weaknesses. Bagasala said three were prior-period adjustments, general-reporting issues, and required corrections to the schedule of expenditures of federal and state awards; those three were corrected in the financial statements during the audit and management provided a corrective-action plan. The fourth finding involved eligibility documentation for a federal TAN program administered by the Department of Social Services; Bagasala said DSS is implementing corrective action to address that finding.
Bagasala also highlighted financial-performance indicators of concern used by the State's Local Government Commission. She noted the water and sewer fund's asset-condition ratio is below 50%, a metric that can indicate aging assets that may need replacement; the county is already addressing that through capital improvements including modernization of a water treatment plant begun in 2024. She also said the audit submission was late this year (the audit was due Dec. 31, 2025 but was submitted in March 2026 after an extended state due date), a timing issue tied to delays in federal guidance.
During a brief exchange after the presentation, Commissioner Valentine asked whether the findings had been addressed. Bagasala replied, "Yes, ma'am. The first three findings were corrected already in the financial statements as presented and the last one Department of Social Services is working to make sure that that finding doesn't reoccur for the next year." Commissioners thanked the auditors for detailed review and fresh perspectives.
Bagasala closed by noting upcoming accounting pronouncements (referred to in the record as GASB pronouncements) that the county and auditors will address in planning for the next audit cycle. The audit partner also mentioned optional quarterly training the firm offers to client staff.
The audit presentation and discussion were followed later in the meeting by the annual comprehensive financial report item and routine board appointments.
