Durham County receives clean FY25 audit but auditors flag material weaknesses and a TANF eligibility finding

An external audit partner said Durham Countys fiscal year 2025 financial statements received unmodified (clean) opinions, while the firm also flagged several material weaknesses and one eligibility finding tied to a federal TANF grant.

"For the report on the basic financial statements, we issued an unmodified or a clean audit opinion," said Leanne Bagasala, engagement partner for Malden(s) and Jenkins. She told commissioners the firm also issued unmodified opinions on federal and state single-audit reports but noted material weaknesses related to prior-period adjustments, general reporting and preparation of the schedule of expenditures of federal awards. Bagasala said the county made corrections during the audit and management prepared corrective action plans.

Bagasala told the board the audit team spent more than 1,100 hours on the FY25 audit. She identified a material eligibility finding related to the TANF program and said Department of Social Services has put corrective action in place to prevent recurrence. On financial performance indicators, the auditor noted the water and sewer funds asset condition ratio is below 50%, flagging potential capital needs, and that the FY25 audit submission was late (submitted in March after an extended deadline of Feb. 12, 2026).

Commissioner Jacobs asked whether the findings had been addressed; Bagasala responded that the first three findings were corrected in the financial statements and that Social Services corrective actions are underway for the TANF finding.