Auditor issues clean opinion but flags payroll, controls and reporting lapses in Northampton County audit

Allen Thompson, the county's contracted auditor, told commissioners the county's financial statements received an unmodified opinion but the audit included multiple findings that require corrective action. "We issued a unmodified report, which is, quote, unquote, a good report," Thompson said during the May work session, adding the audit identified recurring risks auditors test for, including management override of controls and improper revenue recognition.

The audit summary presented to the board shows a general fund balance of roughly $28.8 million and positive cash flow for the county's water and sewer enterprise funds, but it also lists nine formal findings for fiscal year 2024–25. The findings include late audit submission, corrections to previously issued financials, inadequate payroll internal controls that resulted in retirement contributions not withheld for some employees, untimely federal payroll filings that generated penalties, insufficient pre‑audit purchase approvals, and weak credit‑card documentation.

The finance director, identified in the meeting as Edwards, told the board the payroll and withholding problems were discovered in March–April 2025 and were promptly addressed. "The issue was handled and fixed immediately, and those employees affected were notified as well as the retirement system with the state," Edwards said. Commissioners noted the audit reported penalties associated with untimely payroll tax filings; Edwards and Thompson confirmed the county incurred penalties and interest and are reconciling accounts and working with the IRS and state retirement system.

Thompson recommended several control improvements in his presentation, including stricter payroll procedures, better oversight of credit‑card usage and purchase orders, and prompt filing of required returns. He also highlighted disclosure changes from GASB Statement 101 and encouraged monitoring of budget amendments and documentation so the county can reduce repeat findings.

Board members pressed for transparency and timelines for corrective actions. Finance staff said six of the prior year's findings were corrected, three findings were repeats, and four of the current year findings were self‑identified by finance as part of a transparency effort. The board will sign and forward the county's required responses to the Local Government Commission, and staff said the full audit report will be posted online the next day.

Next steps: county staff said they have engaged outside CPA assistance previously, put new policies and training in place, and will follow the auditor's corrective‑action timeframes. The board will receive follow‑up reports and meet with the LGC coach as part of ongoing unit assistance oversight.