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County audit finds qualified opinion on custodial funds, flags Tyler mapping and reporting gaps
Summary
External auditors gave Torrance County an otherwise unmodified opinion for most funds but issued a qualified opinion tied to custodial fund reporting after a software mapping error. Auditors also reported several restatements, a $330,000 reporting discrepancy tied to PERA remittances, and recommended tighter year-end controls and Tyler-system fixes.
The Torrance County Board of Commissioners on April 23 received the fiscal year 2024 audit presentation from TKM Audit Manager Joe Ortiz, who said auditors issued an unmodified opinion for most funds but a qualified opinion on custodial funds because the county’s accounting software mapped several accounts incorrectly during a transition to Tyler.
"You had to have that federal single audit under uniform guidance," Ortiz told the board, noting the county crossed the $750,000 federal expenditure threshold. He said a mapping issue after the Tyler transition caused custodial receipts to be grouped into a single account and prevented auditors from obtaining sufficient evidence for that fund, resulting in a qualified opinion for custodial reporting. "Based on this mapping issue within the software that has now been fixed as of September 30, 2024...we will test it on June 30, 2025," Ortiz said.
Ortiz outlined additional year-end reporting adjustments, including classification changes that required roughly $4 million of restatements across accounting bases (cash, modified accrual, full accrual) and a $400,000 correction to capital assets and appreciation. He described a $330,000 discrepancy between amounts recorded in the general ledger and the periodic remittance forms submitted to the Public Employees Retirement Association and the Retiree Health Care Authority — a reporting/classification issue auditors tied to the Tyler setup rather than missing payments.
County officials said the remittances themselves were made; the concern was the ability to tie those payments to GL accounts for audit verification. Deputy County Manager Misty Witt and County Manager Jordan Barela told the board staff and the prior treasurer worked with Tyler to resolve mapping and that amounts improperly distributed were collected and redistributed to the proper conservation districts after discovery.
Auditors also noted instances of missing supporting documentation for fuel card transactions (one of five tested) and minor compliance items (enrollment forms, exceeded budget authority for a fire pool fund). Ortiz recommended strengthening internal controls at year-end — scanning for dates-of-service, confirming capitalization and depreciation procedures, and ensuring fiduciary beginning balances roll forward correctly.
The board did not take additional formal action at the meeting beyond receiving the report; staff said they are pursuing Tyler support, external consultant assistance, and targeted training for finance staff to resolve outstanding reconciliation and mapping items ahead of the FY2025 audit cycle.
