Independent audit: Lawrence County receives clean opinion but EMS fund deficit draws attention

An audit partner from Love Bailey told Lawrence County Council on July 13 that the county received an unmodified (clean) audit opinion for fiscal year 2025, but flagged ongoing deficits in certain noncapital funds, most notably the EMS (emergency medical services) fund.

"You all received an unmodified opinion, which is a clean opinion," audit partner Will Walls said, explaining that the audit found no material weaknesses or significant deficiencies, and no compliance issues in the single audit performed on federal expenditures (FEMA hurricane Helene funds were tested). Walls said the county’s net position rose about $3.3 million to approximately $57 million and the general fund improved to a roughly $640,000 surplus, but noted unrestricted net position remained negative due to pension and OPEB liabilities.

The audit spotlighted liquidity concerns: unrestricted cash on hand fell from several months in prior years to roughly one month at 06/30/2025, driven by interfund flows toward capital outlay. Walls said the EMS fund had an operating deficit of about $1.8 million for the year and the fire capital reserve also operated in deficit, recommending the council monitor those funds and consider millage and fee structures to ensure each fund operates without draining others.

Council members asked clarifying questions about pages and balances in the report and discussed potential steps — including reviewing millage rates for targeted funds, seeking rate adjustments for certain services, and identifying cost‑cutting measures — to rebuild reserves and stabilize operations.

The audit presentation concluded with staff and council agreeing to monitor monthly cash position versus targets and to consider increased approval controls on unbudgeted spending; no formal vote was required on the audit itself.