Auditors: La Paz County posts clean single-audit but receives qualified opinion on roads accounting

CliftonLarsonAllen (CLA), joined by the Arizona Auditor General’s office, presented La Paz County’s fiscal year 2025 audit exit report to the Board of Supervisors on May 18, saying the county is now caught up on several years of financial statements but still faces lingering control issues.

"You should feel very good about auditors are following standards, and meeting federal requirements as well," Lindsay Perry of the Arizona Auditor General’s office said, thanking county staff for the effort to bring three years of financial statements current in roughly nine months. CLA principal Lupita Martinez told the board the county received a qualified opinion on governmental activities because it uses a modified approach to account for infrastructure assets — notably primitive and gravel roads — and that removing the qualification depends on completing needed data and documentation.

Why it matters: A qualified opinion signals that auditors encountered limitations tied to a particular accounting treatment (here, infrastructure accounting), while a clean single-audit means major federal programs tested had no findings. "For your single audit you had no findings and you received a clean opinion," Martinez said.

Auditors detailed control issues and next steps. CLA reported 11 material weaknesses, which auditors attributed in part to the compressed timeline of catching up several years of audits; they said many of the weaknesses are legacy items that management is addressing and should not reoccur if remediation continues. CLA’s IT lead described nine IT findings in three groups — governance/risk assessment, logical access controls, and physical security/backup — and recommended formalizing a risk-assessment process, expanding multifactor authentication across critical systems, instituting periodic access reviews, hardening physical access controls at server rooms, and improving backup and restoration testing.

The auditors also noted a repeated financial finding related to segregation of duties in the treasurer’s office. Martinez said finance has begun stronger reconciliations to tie departmental deposits and point-of-sale records back to treasurer receipts, a step intended to reduce the risk that differences go undetected.

The report listed several uncorrected misstatements beneath the auditors’ adjustment threshold, including compensated-absence adjustments and modest revenue timing items; auditors described those as immaterial but disclosed the amounts (for example, a $166,104 compensated-absence adjustment in the general fund and a $46,342 sales-tax reclassification).

Board response and next steps: Board members and several county and contract staff praised the turnaround effort. "That is a huge commendable effort," Perry said. Chair Minor and supervisors thanked staff and outside partners (including Walker Armstrong and consultant Karen Ziegler) and urged continued focus on IT remediation and fund consolidation. Auditors provided contact information and encouraged the county to follow up on the management-letter recommendations and the remediation plan to remove the qualified opinion next year. The presentation concluded with no formal action; the board received the report.