Madison County supervisors review state audit findings, consider forensic audit after qualified opinion

MADISON COUNTY — Madison County supervisors spent a meeting reviewing state auditor findings for fiscal 2023 and 2024, focusing on persistent bank-reconciliation problems that led auditors to issue a qualified opinion and on several new internal-control items that appeared for the first time in the 2024 report.

The board’s chair said the bank-reconciliation finding, which stretches back multiple years, was a priority and that staff should keep working until the issue is resolved. "I would like to have this whole bank reconciliation time finding go away, like, completely," the chair said. Staff members told the board they have made progress on October and November records and are working to correct system and coding issues that may have caused longstanding imbalances.

Why it matters: the state auditor’s qualified opinion on the county’s financial statements signals that auditors could not obtain sufficient reliable evidence on material account balances — in this case, reconciliations of bank and fund records — and that the condition has persisted across audit years. Supervisors said the delay in finalizing audits has also complicated corrective work: board members said the 2023 audit was signed late and that the county received large bills for the audit work in 2024, leading to questions about scope and billing.

Board members described specific concerns and next steps. Supervisors asked county staff to compile materials and prioritize the items to be included in a forthcoming forensic-audit request for proposals (RFP). "Either you can say, 'we're going to give these two gals a chance to prove us wrong or right,' or you can ask for more forensic work," one supervisor said. Staff told the board they expect to need roughly six weeks to gather documents and return with a plan.

The board also pressed the auditor and county staff for clearer billing detail. Members reported a roughly $45,000 invoice for the 2023 audit and roughly $57,000 for 2024 and asked staff to ask the auditor for an itemized breakdown of hours and charges and to identify which billed work corresponded to which findings. "If we're being billed for work outside the financial-audit scope, we deserve an explanation," the chair said.

Other notable findings discussed

- Conflict-of-interest flag on building repair: The state report said a $16,100 building-repair transaction "may represent a conflict of interest" because it involved the chief deputy sheriff and — according to the audit summary — was not competitively bid. Supervisors asked staff to search for procurement records or competing bids; if the county locates bids, they asked staff to follow up with the state auditor to correct the record.

- County conservation account: Auditors found that the county conservation department maintained a separate checking account for camping and facility rental revenues that was not fully included in the treasurer’s records. The board asked staff to consult the state auditor about the correct reporting procedure and to ensure the treasurer’s office receives and records all receipts going forward.

- Timely deposits and undeposited receipts: Staff described a change to in-house check scanning that has reduced delays; the board asked for continued procedures and guidance about handling cash deposits, especially during peak tax times.

- Journal entries and independent review: The auditor recommended documenting independent review and approval of journal entries. Staff said they will institute a policy requiring a documented reviewer sign-off on journal entries going forward.

What supervisors asked staff to do

Supervisors requested that county staff: - Compile documentation supporting corrections to bank reconciliations and provide a prioritized work plan for a forensic-audit RFP; - Search for procurement records related to the $16,100 building repair and report back; - Ask the state auditor for clearer detail about the timing and billing of audit work and for an itemized justification of charges related to fiscal 2023 and 2024; and - Return to the board in about six weeks with documents and recommended policy updates (for example, a petty-cash/change-fund policy, journal-entry signoff, and records-retention guidance).

Auditor’s statutory citation and reporting issues

During the meeting the board quoted the state report’s language that the transaction "may represent a conflict of interest in accordance with chapter 331.30342, subsection 2 j of the Code of Iowa" and discussed whether documented bids exist to refute that conclusion.

Votes at a glance

- Agenda approval: motion moved and adopted by voice vote (all "aye"). - Adjournment: motion moved, seconded, voice vote (all "aye").

The board adjourned after setting a follow-up timetable. Staff will return with documentation and a proposed schedule for additional work and possible RFPs.