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Storey County approves corrective-action plan after state audit flags fund shortfalls and water/sewer accounting issue
Summary
The Storey County Board unanimously approved a corrective-action plan responding to the Nevada Department of Taxation's review of the FY2025 audit, addressing shortfalls in two special revenue funds and raising a depreciation-related concern for the county's water and sewer funds.
The Storey County Board of County Commissioners unanimously approved a plan of corrective action to respond to the Nevada Department of Taxation's review of the county's FY2025 annual audit, Controller Jennifer McCain said.
"This is kind of the final step with the audit," McCain said in presenting the plan, explaining the county sent the audit to the Department of Taxation, which identified several matters the county must address. McCain said the county made transfers to restore fund balances: a $100,000 transfer was made to the indigent accident special revenue fund but left an estimated shortfall of $72,000 against prior projections, and a $1,500 transfer was made to the genetic marker special revenue fund to cover a smaller shortfall (the exact figure was unclear in the transcript).
McCain also told commissioners that the Department of Taxation flagged an accounting issue in the water and sewer enterprise related to depreciation. "We don't budget for depreciation," she said, describing depreciation as a non‑cash expense that appears in audits because it represents the cost of using infrastructure to provide services. She said limited ratepayers constrain the county's ability to increase rates to cover operational costs and that staff are working with taxation and the county auditor on ways to minimize the deficiencies.
Commissioners asked no follow-up questions. The vice chairman moved to approve the plan of corrective action; the motion was seconded and passed unanimously.
The item advanced the county's formal response to the Department of Taxation; the letter McCain said she drafted for submission to taxation was included in the meeting packet and will be sent with the board's approval.
Next steps: staff will send the corrective-action letter to the Department of Taxation and continue discussions with the county auditor and taxation staff about options for addressing the depreciation and operational‑revenue issues in the water and sewer funds.
