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Auditor issues disclaimer for Princess Anne books; warns of missing records and urges staffing, reconciliation fixes
Summary
An auditor told Princess Anne commissioners the firm issued a disclaimer of opinion for the prior period due to missing support and turnover, flagged material weaknesses (missing transaction support, segregation of duties) and recommended monthly reconciliations and adding finance staff; about $1.2 million in ARP funds remained unearned, the auditor said.
An independent auditor told the Town Commissioners of Princess Anne on June 3 that the firm had issued a disclaimer of opinion for the town27s recent financial statements and identified material weaknesses and significant deficiencies in internal control that must be addressed.
"We did issue a disclaimer opinion," the auditor said during a detailed presentation of the audit package. The auditor told commissioners the 2022 opinion had been a disclaimer because the firm could not obtain adequate supporting documentation and because of turnover in management; similar documentation gaps affected the period under review.
The auditor itemized financial highlights for commissioners: total capital assets reported about $2,600,000; restricted cash set aside for the industrial park of about $372,000; unrestricted cash roughly $141,000; bonds were paid down by roughly $95,000 in the year presented; and an impairment loss related to the Washington Inn sale was disclosed. The auditor also discussed pension liabilities tied to the state plan and noted that the liability estimate (about $1.8 million) is sensitive to the discount rate.
On American Rescue Plan Act funds, the auditor said the town had received awards and recorded about $1.2 million in unearned revenue to be used in future periods. The presentation also noted prior-period adjustments and a note receivable/payable associated with Somerset Reserve, disclosures commissioners were asked to review.
Internal-control findings: the auditor reported significant control weaknesses and a material weakness tied to incomplete documentation and limited segregation of duties. In one sample, 27 of 120 credit-card transactions lacked supporting documentation. The firm recommended stronger internal controls and operational practices: secure credit cards, reconcile statements monthly, review authorized users at least annually, and follow Government Finance Officers Association guidance on timely financial reporting and internal control.
Commissioners and staff responded that many corrective steps are under way: management has worked to clean up the Washington Inn matter and to address previously missing receivables, and commissioners discussed budgeting for permanent finance staff to reduce reliance on outside firms. The auditor said the town will begin the FY2024 audit soon and that improvements in documentation and staffing would improve future audit outcomes.
What happens next: The audit presentation was informational in the session; no formal acceptance vote appears in the transcript. Commissioners discussed budgeting for additional finance and code-enforcement staff and referred to follow-up steps to reconcile monthly statements and provide additional documentation to auditors.
