The FY2024 audit flags two material weaknesses—the most serious internal-control category—identified as 2024-001 and 2024-002.

2024-001 (Audit Administration and Preparation) reports that four funds required adjustments to beginning fund balance/net position and that numerous funds required year-end adjustments to accounts receivable, unearned revenue, and related revenue. The stated cause is that the County did not follow its financial reporting policy for audit administration and preparation; the stated effect is that four funds were materially misstated and required restatements. This is explicitly a repeat finding from 2023-001 and 2022-001.

2024-002 (Capital Assets) states the County’s property, plant, and equipment were not properly reported when auditors initially received current-year activity; the stated cause is inadequate controls and processes. The stated effect includes misclassification of construction in progress and restated capital assets. This is also a repeat finding from 2023-002 and 2022-002.

These repeat findings don’t prove intent, but they do document a multi-year pattern of policy noncompliance and restatements.

The FY2023 audit identifies two material weaknesses in Lincoln County’s internal control over financial reporting. A material weakness is defined by the auditors as a condition in which there is a reasonable possibility that a material misstatement of the County’s financial statements would not be prevented, detected, or corrected in a timely manner

The first material weakness concerns audit administration and financial statement preparation. The audit reports that multiple funds required post-audit adjustments, including corrections to beginning fund balances and year-end balances. As a result, the County’s financial statements for prior periods were restated to correct misstatements. The finding explicitly notes that required internal policies for audit preparation were not fully followed, meaning material errors were identified only after external audit review rather than through County controls.

The second material weakness relates to capital asset accounting. The audit states that capital asset activity was not properly reported when initially prepared, including misclassification of construction-in-progress and errors requiring restatement of capital asset balances.

Both material weaknesses are identified as repeat findings, having appeared in earlier audits and remaining unresolved in FY2023. While the audit does not assert intent or wrongdoing, the persistence of these same control failures over multiple years documents a pattern of unresolved internal control deficiencies that required repeated correction through restatements rather than timely internal detection.

The FY2022 audit identifies two material weaknesses in Lincoln County’s internal control over financial reporting. A material weakness, as defined by the auditors, is a deficiency such that there is a reasonable possibility a material misstatement of the County’s financial statements will not be prevented or detected in a timely manner.

The first material weakness relates to audit administration and financial statement preparation. The audit reports that the County’s financial statements required significant audit adjustments, including corrections to beginning fund balances and year-end account balances. As documented by the auditors, these errors were not identified through internal controls and required post-audit correction, resulting in restated balances.

The second material weakness concerns capital asset accounting. The audit states that capital asset activity was not properly reported when initially prepared, including misclassification of construction-in-progress and related errors that required restatement of capital asset balances.

Both material weaknesses identified in FY2022 later appear again in subsequent audits as repeat findings, indicating they were not fully corrected in later years. The audit does not allege intent or misconduct. However, the recurrence of the same material weaknesses establishes a documented, multi-year pattern in which known internal control deficiencies were identified, corrected after the fact, and allowed to persist beyond a single audit cycle.

The FY2021 audit documents serious internal-control failures that resulted in material restatements, laying the groundwork for what later audits formally classified as material weaknesses. During FY2021, Lincoln County was required to record prior-period adjustments totaling approximately $1.8 million to correct errors in beginning net position and multiple fund balances.

These adjustments affected several major funds and were necessary to correct misstatements that had not been identified through normal internal controls.

The audit disclosures show that errors existed in financial statement preparation and audit administration, as material corrections were made only after audit review rather than through County-level detection. In addition, the financial statements reflect capital asset corrections, including adjustments related to depreciation and construction-in-progress classifications, indicating weaknesses in capital asset tracking and reporting.

While the FY2021 auditor did not yet label these deficiencies as “material weaknesses,” the scope and dollar magnitude of the restatements meet the definition later applied in subsequent audits. Importantly, these same issues—financial statement preparation errors and capital asset misreporting—reappear in later years as repeat material weaknesses, confirming they were not isolated or fully corrected after FY2021.

The audit does not allege fraud or misconduct. However, the presence of large restatements and the persistence of the same control failures in later years establish a documented pattern of insufficient internal oversight and delayed corrective action, rather than timely prevention or detection.