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Montgomery County audit: Unmodified opinion, strong reserves but control findings noted
Summary
County auditors issued an unmodified opinion on Montgomery Countyfinancial statements and highlighted a healthy general fund (unassigned balance ~ $41 million), but flagged several indicators of concern and three findings including a bonding lapse for a former finance director and timing/restatement issues.
Montgomery County auditors presented the fiscal year ending June 30, 2025 audit to the Board of Commissioners, issuing an unmodified opinion while identifying internal-control and reporting issues that require responses to the Local Government Commission.
Lean Bagosala, audit partner at Moss and Jenkins, told the board the firm issued an unmodified opinion on the countyfinancial statements and praised the countyfiscal reserves, saying the unassigned general fund balance is "almost $41 million or 72% of the general fund." She noted the countytotal general fund balance is about $56.7 million.
But Bagosala walked commissioners through several indicators of concern that must be explained to the state Local Government Commission. Those include transfers out in the water and sewer (about $1.1 million) that net with transfers in on the financial statements, a capital-asset condition ratio below 50% for the public utilities fund (a multi-year trend the auditor advised the county to monitor), and a set of internal-control and budget-adoption indicators the audit flagged as failures requiring explanation.
The audit report identified three specific findings. First, a prior finance director did not meet bonding qualifications for part of the year, creating a bonding lapse Bagosala characterized as a timing and compliance issue that the county has corrected. Second, the county recorded lottery-related revenue in a timing that requires explanation after a $250,000 payment where reimbursement could have been requested. Third, auditors noted several restatements of previously issued financial statements (including an opiate settlement revenue timing issue) and a single federal grant payroll time-sheet exception in Medicaid-related testing.
Bagosala said management has prepared a corrective-action plan and the audit opinions on federal and state single-audit components remain unmodified despite a significant deficiency disclosed in the single-audit testing. She also told the board the audit filing was technically late this year because the federal compliance supplement was delayed and the Local Government Commission granted an extended filing date.
Commissioners asked clarifying questions about the effect of transfers and the countyresponse. The auditor repeatedly described the flagged items as explainable or timing-related and said they did not change the auditorsopinion. "We issued an unmodified opinion," she said.
The board accepted the presentation and auditorsrecommendations and directed staff to file the required responses with the Local Government Commission and to continue implementation of the corrective-action plan.
The presentation concluded with auditors offering training and assistance on new GASB pronouncements the county will implement in upcoming years.
