External auditors give Kootenai County an unmodified opinion; no material weaknesses found

Kootenai County’s external auditors delivered a largely positive audit of the county’s FY2025 financial statements at the March 17, 2026 commissioners meeting, saying the statements ‘‘present fairly in all material respects’’ and reporting no material weaknesses in internal control.

‘‘In our opinion based on our audits and the reports of other auditors, the accompanying financial statements . . . present fairly in all material respects the respective financial position of the county,’’ said Jody Doherty, engagement partner with the audit firm I Bailey, summarizing the independent auditor’s report. Doherty told commissioners the firm also reviewed required supplementary information and read other material in the annual comprehensive financial report (ACFR) without expressing an opinion on that other information.

The auditors also reported no reportable deficiencies in internal control and no instances of noncompliance that required reporting from their audit work. In a separate report on federal awards, I Bailey said the county complied "in all material respects" with the compliance requirements tested for two major programs audited this year: the Coronavirus State and Local Fiscal Recovery Funds (ARPA) and the Federal Transit Cluster.

Audit staff member Kelly told the board the communication to those charged with governance identified two significant accounting estimates—liabilities for landfill closure and postclosure, and pension-related deferred inflows and outflows—and disclosed an uncorrected, immaterial misstatement of roughly $630,000 related to current-year revenue. "There is an uncorrected misstatement of around 630,000," Kelly said.

County staff members guided the board through key figures in the ACFR. Keith Taylor, who introduced the report, highlighted that property-tax revenue rose from about $64.3 million in 2024 to roughly $66 million in 2025 (about a 3.2% increase), that ARPA funds were fully expended by year-end, and that the county recorded an increase in capital assets—about $19–20 million—largely reflecting completion of the justice building.

Taylor also called attention to fund-balance figures the commissioners are due to act on: an assigned fund-balance total of about $18,563,000 and an unassigned general-fund balance of roughly $32,679,000. He said the general fund showed a net decrease of about $4.6 million for the year, driven in part by a $3 million transfer out to support the county’s self-insurance (health insurance).

On the county’s health-insurance fund, Taylor said there were no reserves at year-end and that claims exceeded departmental charges—departments were charged about $15.1 million while claims were about $17.9 million—leaving an approximate $2.7 million deficit that will require general-fund support.

Taylor also reviewed enterprise results, noting Solid Waste reported nearly $19.9 million in revenue against roughly $17 million in expenses, and pointed commissioners to the statistical section and budget-to-actual schedules for trend analysis and department-level budget performance.

The auditors said they had no findings related to the single-audit testing of ARPA or the transit cluster, and they praised the finance and grants teams for their policies and audit support. The board had no immediate questions; auditors said they would resend the governance letter to commissioners for review. The commissioners adjourned at 11:49 a.m.; a fund-balance assignment item is scheduled for the board’s next meeting.