Auditor General: Maricopa County gets clean financial opinion; single-audit qualified for one federal program, four findings reported

The Arizona Auditor General, Lindsey Perry, told the Maricopa County Board of Supervisors on June 23 that her office issued an unmodified, or "clean," opinion on the county's fiscal year 2025 financial statements but reported a qualified opinion on the federal single-audit because of noncompliance in one major federal program. "We issued an unmodified or a clean opinion, which means that the county's financial statements are reliable," Perry said.

The presentation summarized three reports auditors issue annually: the county's comprehensive annual financial report, the report on internal control and compliance, and the federal single audit. Katherine Wredecker, the audit director who walked the board through the highlights, said total county revenues decreased by approximately $166 million in FY2025, largely because federal and state grant revenues fell by about $86.5 million as COVID-related funding tapered off. She said the county's net position rose by $454.6 million to $6.1 billion as of June 30, 2025, but stressed $4.4 billion was invested in capital assets and $952.8 million was restricted, leaving $725.6 million unrestricted.

Audit manager Michelle Walters described the FY2025 findings and recommendations. Two financial-statement findings were reported: 2025-01, deficiencies in the county's process for managing and documenting risk that could expose operations and IT systems to harm; and 2025-02, insufficient control procedures over IT systems and data (including change-management, logging/monitoring and access-review weaknesses). Walters said the county reported plans to correct those financial-statement findings by June 30, 2026.

On the single-audit side, Walters said auditors reported two federal compliance findings. Finding 2025-101 concerned the Human Services Department's reporting of Community Development Block Grant subawards: auditors found required subaward information missing or inaccurate for five of five sampled subawards in the federal reporting system (FFATA reporting), which reduced transparency of subaward expenditures. The county told auditors it anticipates implementing corrective measures by December 31, 2026.

The second federal finding, 2025-102, involved the Housing Authority of Maricopa County. Auditors reported that the authority did not maintain complete and accurate participant files for 25 of 25 sampled records, which "increases the risk that some participants were ineligible" to receive program benefits, Walters said. During board questioning, Housing Authority staff told the board the missing items were HUD EIV verification reports; Mr. Manatt, representing the Housing Authority, said the 25 files had been corrected and that the authority performed 100% quality control on participant files after the audit.

County Manager Pokorowski said the county has adopted policies and oversight to address the IT findings and characterized the IT exceptions as not material and not indicative of a security compromise. Marcy Flanagan, speaking for the Human Services Department, told the board that HSD had completed the recommended procedures as of the day before the meeting and had implemented step-by-step processes for entering information into the FAPDIS system and performing independent reviews. Flanagan cautioned that multi-year CDBG subawards already in the system may cause repeated findings until contracts close, even when entries are corrected.

The auditors and county staff emphasized both the need to fix documentation and the importance of processes that ensure required documents are consistently placed in participant files. Perry noted auditors follow up on prior-year findings until they are fully corrected and said the actions taken through June 30, 2026, will affect the county's FY2026 audit.

The board did not take formal policy action during the presentation; after questions the auditors were excused and the board moved on to an executive session. The board also recorded remedial timelines reported by staff: Housing Authority corrective actions reported as completed for the 25 files and anticipated formal correction date listed as April 12, 2026; FFATA/CDBG corrections anticipated by December 31, 2026; and IT-related remediation targeted by June 30, 2026.