External auditors give Walworth County a clean opinion; fund balance and cash position highlighted

Justin Hoagland, principal at Baker Tilly US LLP, told the Finance Committee on Thursday that the county's fiscal year 2024 financial statements earned an unmodified (clean) opinion and that auditors recorded zero audit entries during the engagement.

"We did issue your 2024 reports back on May 23... We had zero audit entries again this year," Hoagland said. He added the county also had no material weaknesses or significant deficiencies in internal control.

Hoagland reviewed financial highlights: the county has no outstanding debt, which he described as uncommon among municipalities his firm audits, and the general fund's unassigned fund balance equates to about 42% of annual budgeted expenditures — approximately five months of operating coverage. "That calculates up to 42% or about five months. We always like to see at least two months as the minimum," he said.

Hoagland also noted a restatement related to implementation of GASB 101 concerning compensated absences; the restatement adjusted beginning balances but was not the result of an error.

On revenue and expenditure performance, the auditors reported the county's general fund results exceeded budgetary expectations, with better-than-budget revenues driven by higher investment income and sales tax receipts and expenditures under budget in several functions. Hoagland said the county's net income was strongly positive for 2024 and that the county's financial controls and centralized accounting practices support reliable monthly budget reporting.

Hoagland pointed to three industry trends for local governments — grant funding pursuit, digital transformation and cybersecurity — and encouraged the county to consider those in planning. He also said the firm was in the process of completing the county's single audit of federal and state grants and had found no noncompliance so far.

No committee action was required on the audit presentation.