County reviews late audit reasons, areas for improvement moving into budget presentation June 2
- Chuck Thompson
- 12 hours ago
- 4 min read
By Chuck Thompson | The Shelby Independent
The Cleveland County Board of Commissioners listened to County Manager David Cotton present the FY 2024-2025 Audit Response this past week during the May 19 public meeting.
A consultant via the North Carolina of Commissioners was hired to assess the county’s readiness for the upcoming audit and to explain why the previous audit was late.
Everything from the process to staff, the consultant interviews and investigated everything to which Cotton said the issue came down to the cause of the late audit being “multi-fold,” as Cotton put it and a number of contributing factors.
According to the report released by Johanna Sharpe, LLC., the assessment firm hired by the county and conducted last month. The review concluded several things:
The Board of Commissioners and County Management engaged this assessment to understand why the FY25 audit was not completed by the extended statutory deadline of February 12, 2026 (submitted to Local Government Commission on March 17, 2026) and to ensure that the FY26 audit is filed on time. The goal of the assessment was not to assign blame but to evaluate the underlying systems, processes, roles and capacity that support financial reporting and to recommend practical steps for improvement. The assessment focused on:
Root cause analysis - identify the factors that led to the delayed FY25 audit completion and reporting.
Structure and internal controls - evaluate the finance department's organizational structure, staffing and internal controls.
Audit readiness practices - assess how the department plans for and coordinates the audit, including use of the Prepared by Client (PBC) organizer, timelines and communication with external auditors.
Communication and oversight - review how the County Manager and Board receive information about the audit process and how oversight is carried out.
Future-readiness: identify action steps to ensure timely, accurate financial reporting.
The bank reconciliation backlog was the “primary driver” stated Cotton. “The inability to complete the bank reconciliation promptly.”
Cotton said finance staff were instructed to discontinue the daily review of bank transactions which created a bottleneck. He also said the Keystone module isn’t robust enough to provide reliable data for their largest accounts and have now switched back to XL for a smoother system.
Another contributing factor, said Cotton, was the former finance management team implementing changes that were “not fully communicated to staff that would be impacted by the changes, and staff noted that changes initiated by former finance leadership were not adequately communicated or sequenced.”
Cotton said current finance staff believes innovative changes need to be implemented slowly.
Some strengths were noted the staff stepping up to help and work together.
Some recommendations from the consultant were assigning specific tasks, related to the audit to staff, with specific deadlines; enforcing cutoff deadlines for accounts payable and accounts receivable, along with some software changes.
Commissioner Tony Berry noted to Cotton, “We should always be transparent on any of our financials, because it’s our citizen’s money – it’s certainly not our money.”
(Late audit comments continued below...)
“It doesn’t mean we didn’t make a mistake and we own our mistakes when we do those things. I think it’s imperative that we own those,” added Berry.
He also said the best thing he heard Cotton say during the meeting was the fact they have a new formatted report available on a monthly basis to anyone that wants to see it.
“We still have some work to do – I realize that, but we also made some department cuts in the budget this year, which are never easy, never popular but sometimes necessary. I hope we can continue to work toward what the citizens elected us to do,” he concluded.
Commissioner Doug Bridges also commented, stating, “We’re all disappointed that we got in the shape we were, but we appreciate the transparency and getting back to where we need to be and will be shortly.”
Commissioner Johnny Hutchins thanked Cotton, saying, “We appreciate what had to be done. It’s been hard but it had to be done.”
“As Commissioner Berry mentioned, the board has made some changes,” Chairman Gordon said. “There will be a monthly report made public and the board will get a quarterly report on the state of the audit moving forward.” Gordon noted there would be more county commissioner meetings throughout the year due to these changes.
He thanked Cotton for his work and also thanked all finance staff and noted the audit was late, stating it was shy three months overdue.
“Which we’re not going to tolerate,” said Gordon about a late audit. Adding there is no reason to harp on the issue as much as it’s been discussed and to have everyone move forward from his point onward.
“We know what the expectation is – which is to be on time,” Gordon said sternly.
The Cleveland County Board of Commissioners will hold the budget public hearing on Tuesday, June 2, 2026, at 6 p.m. in the County Administration Building.
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Chuck Thompson is a reporter and columnist for The Shelby Independent.
The Shelby Independent.
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