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HomeMy WebLinkAboutAgenda - 02-25-2025; 4-a - Presentation of Annual Comprehensive Financial Report for FYE 6-30-2024 and Approval of Audit Services Contract Amendment 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 20, 2025 Action Agenda Item No. 4-a SUBJECT: Presentation of Annual Comprehensive Financial Report for FYE 6/30/2024 and Approval of Audit Services Contract Amendment DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: 1. GFOA Award for Excellence in Gary Donaldson, (919) 245-2453 Financial Reporting 2. PowerPoint Presentation - Mauldin & Jenkins 3. Audit Services Contract Amendment UNDER SEPARATE COVER 4. Annual Comprehensive Financial Report, June 30, 2024 ONLY AVAILABLE ELECTRONICALLY AT. http://www.co.orange.nc.us/732/Finan cial-Audit PURPOSE: To: 1) receive a presentation on the Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024; and 2) Approve an Audit Services Contract Amendment for Fiscal Year 2024. BACKGROUND: The ACFR reports on all financial activity of the County for the fiscal year July 1, 2023, through June 30, 2024. Mauldin and Jenkins, LLC, a firm of Certified Public Accountants, audited the financial statements. The financial statements and audit are required by Chapter 159- 34 of the North Carolina General Statutes. The County prepares an Annual Comprehensive Financial Report (ACFR) that meets the standards set by the Government Finance Officers Association (GFOA). The ACFR is submitted to the GFOA to be awarded the Certificate of Achievement for Excellence in Financial Reporting. The financial report for the Orange County Sportsplex, as required under the management contract, is included in the County's ACFR. The County received an unmodified (clean) audit opinion on the financial statements received from the audit. The financial audit results indicate compliance with County financial policies. The Chief Financial Officer and representatives of Mauldin and Jenkins, LLC will cover highlights of the report and answer any questions. While completing the FY 2024 audit, Mauldin and Jenkins incurred $15,000 in additional cost resulting from time spent on statement reconciliations due to a financial software error. This issue 2 has now been resolved. Under North Carolina General Statute 143-129(e)(2), certain professional services including audit, legal and consulting are not subject to the same competitive bidding requirements as goods and construction contracts. The governmental audit industry has experienced a significant decrease in audit firms with the capacity to provide audit services of the quality required by the County. The attached Audit Services Contract Amendment increases the FY 2024 cost from $120,000 to $135,000. The FY 2025, 2026 and 2027 audit budgets are expected to be $135,000, $140,000 and $145,000 respectively. The County will be required to submit annual Local Government Commission audit contracts for Board approval through the amended audit engagement period. FINANCIAL IMPACT: The financial report indicates a strong financial position for Orange County. The Audit Services Contract Amendment increases the FY 2025 expense from $120,000 to $135,000, with the funding included in Budget Amendment #6 on this February 20, 2025 meeting agenda. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GOAL 6: DIVERSE AND VIBRANT ECONOMY RECOMMENDATION(S): The Manager recommends that the Board: 1) Receive the presentation on the Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2024 as information; and 2) Approve the Audit Services Contract Amendment for the Fiscal Year 2024 audit services. 3 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to Orange County North Carolina For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2023 Executive Director/CEO 4 ORANGE COUNTY NORTH CARO INA TxA1 Presentation of Audit Results June 30, 2024 A T 5 Orange County, North Carolina Agenda Engagement Team Overview of: Audit Opinion Financial Trends Compliance Report Required Communications Accounting Recommendations and Related Matters Answer Questions Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 6 Orange County, North Carolina I1SI111a ` 11µiyi-fit t 300+ 1 100 f FI� * t * t * f tts + t tatift SIWLE ALIDITS PERFORMED LAST ?n71 _ II II II YEAR COVERING OVER$5.3 BILLION OF FEDERAL GRANTS CONSISTENTLY RANKED A5A TOP ACCOUNTING FIRM IN THE U.S. TEAM MEMBERS DEDICATED 40+ TO SERVING THE � �� ��� 1 100+ year GOVERNMENTAL INDUSTRY + • HOURSANNUALLY HISTORY , +'� A�r'r PROVIDED TO }� •, .+.. .. _ '� ` �OF QUALITY SERVICE :� ,�,�, r`'"""br GOVERNMENTAL CLIENTS ,y 5�� 3a ° CURRENT CLIENTS AWARDED Serve 700+ MAULDIN&JENKINS 1 75+ THE GFOA CERTIFICATE OF GOVERNMENT CLIENTS F EXCELLENCE GOVERNMENTAL 18 14 p PARTNERS witi�s>v STATES OFFICES ' 7.Ar Rrrrrw,l.hr,.r.�,nn_o-.,r.r.r!M1wr,Mry�r.�.a.-r rhrney4.u.r ..xur>_'nr,i..r wrWW ar.e«..r-W,rr.A�-W, Lrkdrnhgt.wf JQ&-K.!r Engagement Team Leaders • Tim Lyons, Engagement Partner I Grant Davis, Quality Review Partner Chad Jackson, Manager Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 7 4)1111111011� Orange County, North Carolina Audit Opinion • Our Responsibility Under Auditing Standards Generally Accepted in the United States of America (GAAS) We considered the internal control structure for the purpose of expressing our opinion on Orange County, North Carolina's (the"County") basic financial statements, not for the purpose of providing an opinion on the effectiveness of internal controls. Our audit was performed in accordance with GAAS and Government Auditing Standards. Our objective is to provide reasonable—not absolute—assurance that the basic financial statements are free of material misstatement. The basic financial statements are the responsibility of the County's management. We did not audit the financial statements of the Orange County ABC Board. The financial statements of the ABC Board were audited by other auditors whose report was furnished to us, along with certain other required communications. Our opinion on the County's financial statements is based solely on the report of the other auditors who performed the audit of the ABC Board. The financial statements of the ABC Board were not audited in accordance with Government Auditing Standards. • Report on Basic Financial Statements Unmodified ("clean") opinion on basic financial statements. Presented fairly in accordance with accounting principles generally accepted in the United States of America. Our responsibility does not extend beyond financial information contained in our report. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 8 40w� Orange County, North Carolina Compliance Reports • Government Auditing Standards ("Yellow Book") Report The financial report package contains a report on our tests of the County's internal controls and compliance with laws, regulations, etc. The report is not intended to provide an opinion on internal controls nor is it intended to provide a legal determination on the County's compliance with applicable laws and regulations. This report and the procedures performed are required by Government Auditing Standards. • Compliance Reports We were required to perform Single Audit procedures on six (6) major programs (3 Federal and 3 State of North Carolina programs). We issued a report on the County's federal programs in accordance with the Uniform Guidance. That report contained an unmodified opinion on compliance. We issued a report on the County's state programs in accordance with the State of North Carolina Single Audit Implementation Act. That report contained an unmodified opinion on compliance. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 A T 9 Orange County, North Carolina Financial Trends - Composition of Fund Balance Trends from 2023 to 2024 Fund Balance Categories - General Fund 2023 Fund Balance: $80.4M 50,00-0,000 45,000,000 2024 Fund Balance: $82.3M 40,000,000 Decrease to unassigned fund 35,000,000 balance of approximately 30,000,000 $3.3 million — mostly related 25,000,000 to the increase in the RSS 20,000,000 calculation required by the 15,000,000 State of North Carolina. 1,0,000,000 Unassigned fund balance as 5000000 , of June 30, 2024, is 16.2% of General Fund expenditures 2022 2023 2024 which is compliant with County policy disclosed in ■Nonspendable ■ Restricted ■ Committed ■Assigned ■ Unassigned Note 1 to the F/S. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 10 'a Orange County, North Carolina Financial Trends - General Fund Revenue Other. 2.7% Charges for services, 4.5% Intergovernmental. 7.1% Sales Taxes. 15.4% Property Taxes_ 70.3% 2024 2023 Diff Property Taxes 194,357,055 188,249,567 6,107,488 Sales Taxes 42,643,725 43,396,780 (753,055) Intergovernmental 19,564,355 19,363,115 201,240 Charges for services 12,504,920 14,035,772 (1,530,852) Other 7,444,289 4,195,050 3,249,239 276,514,344 269,240,284 7,274,060 Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 A T 11 Orange County, North Carolina Financial Trends - General Fund Revenue Orange County, North Carolina General Fund Revenues Significant Fluctuations FY2023 FY2024 Sales Tax Revenues: Article 39 $ 16,430,626 $ 17,030,801 Article 40 11,785,331 11,946,792 Article 42 8,240,839 8,532,318 Article 44 284,938 307,662 Medicaid Hold Harmless 6,655,046 4,826,152 Total $ 43,396,780 $ 42,643,725 FY2023 FY2024 Miscellaneous Revenues: Investment income $ 1,809,873 $ 2,362,680 Other 2,385,177 5,081,609 $ 4,195,050 $ 7,444,289 Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 A T 12 _40W� Orange County, North Carolina Financial Trends - General Fund Expenditures 2024 2023 Diff % age Community services $ 14,704,939 $ 14,595,312 $ 109,627 5% General government 12,367,020 13,103,299 (736,279) 4% Public safety 38,083,670 33,434,999 4,648,671 13% Human Services 46,426,806 38,758,538 7,668,268 16% Education 107,594,753 97,969,758 9,624,995 38% Support services (*) 22,427,279 11 ,805,338 10,621 ,941 8% Debt service (**) 41 ,101 ,908 41 ,750,825 (648,917) 15% $ 282,706,375 $ 251 ,418,069 $ 31 ,288,306 100% * Support services for 2024 include approximately $8.5 million of non-cash capital outlay related to the recording of new leases and subscriptions under GASB 87196. ** Debt service expenditures includes approximately $21.2 million of principal and interest payments on school-related debt for the fiscal year ended June 30, 2024. When the balance of those payments is added to non-debt service, total expenditures for education total approximately $128.8 million or 46% of total General Fund + Debt Service Fund expenditures. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 A T 13 Orange County, North Carolina Financial Trends - Proprietary Funds Solid Waste Enterprise Fund 2024 2023 Change Operating revenues $ 11 ,093,956 $ 11 ,001 ,798 $ 92,158 Operating expenses 11 ,903,792 9,430,416 2,473,376 Operating income (809,836) 1 ,571 ,382 (2,381 ,218) Unrestricted net position 8,857,525 9,696,271 (838,746) Operating cash flow 1 ,264,554 1 ,277,803 (13,249) Overall cash flow 467,457 (502,536) 969,993 SportsPlex Enterprise Fund 2024 2023 Change Operating revenues $ 5,497,730 $ 4,769,351 $ 728,379 Operating expenses 5,889,969 4,117,559 1 ,772,410 Operating income (392,239) 651 ,792 (1 ,044,031) Unrestricted net position 318,997 647,736 (328,739) Operating cash flow 257,861 1 ,116,326 (858,465) Interfund transfers 746,694 - 746,694 Overall cash flow (381 ,919) 374,190 (756,109) Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 14 4)011� Orange County, North Carolina Required Communications • Significant Accounting Policies • Management is responsible for the selection and use of appropriate accounting policies. • The significant accounting policies used by the County are described in Note 1 to the basic financial statements. During the current year, the County was required to implement the provisions of GASB Statement No. 100, Accounting Changes and Error Corrections; this new standard did not have an impact on the County. • The policies used by the County are in accordance with generally accepted accounting principles. In considering the qualitative aspects of its policies, the County is not involved in any controversial or emerging issues for which guidance is not available. • Management Judgment/Accounting Estimates Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. The County uses various estimates as part of its financial reporting process - including actuarial assumptions. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 15 40w� Orange County, North Carolina Required Communications (Continued) • Relationship with Management We received full cooperation from the County's management and staff. There were no disagreements with management on accounting issues or financial reporting matters. • Management Representation We requested, and received, written representations from management relating to the accuracy of information included in the financial statements and the completeness and accuracy of various information requested by us. • Consultation with Other Accountants To the best of our knowledge, management has not consulted with, or obtained opinions from, other independent accountants during the year, nor did we face any issues requiring outside consultation. • Significant Issues Discussed with Management • There were no significant issues discussed with management related to business conditions, plans, or strategies that may have affected the risk of material misstatement of the financial statements. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 16 4)111111011� Orange County, North Carolina Required Communications (Continued) • Audit Adjustments Several adjustments were required during the conduct of the audit; these adjustments have been provided to management and they have provided us with representations that the adjustments have been posted to the County's general ledger. We did not have any passed audit adjustments. • Financial Statement Disclosures The footnote disclosures to the financial statements are also an integral part of the financial statements and the process used by management to accumulate the information included in the disclosures was the same process used in accumulating the statements. The overall neutrality, consistency, and clarity of the disclosures was considered as part of our audit. • Information in Documents Containing Audited Financial Statements Our responsibility for other information in documents containing the County's basic financial statements and our report thereon does not extend beyond the information identified in our report. If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, we must be provided with printers' proof for our review and approval before printing. You must also provide us with a copy of the final reproduced material for our approval before it is distributed. • Auditor Independence In accordance with AICPA professional standards, M&J is independent with regard to the County, its component unit, and its respective financial reporting processes. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 17 40w� Orange County, North Carolina Audit Findings • 2024-001 Accounting for Cash Transactions and Reconciliation of Bank Accounts Using the County's Enterprise Resource Planning (ERP) System Issue: We noted the County's main operating bank account was not reconciled properly in a timely manner. Internal controls were not sufficient to detect material misstatements in the reporting of cash balances. Cause/Context: The issues noted appear to result from system generated entries that were created in error during a period of turnover in key positions at the beginning of the fiscal year under audit. Internal controls were not sufficient to identify and correct these errors in a timely manner. County Response: Finance met with the Enterprise Resource Planning software technical team and remediated the issue during the audit engagement. Finance has updated our Accounting Policies and Procedure Manual to include additional monthly processes to ensure that financial statements are properly presented in accordance with generally accepted accounting principles. The new Accounting Manager has reviewed these processes with his new Accountants. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 18 40w� Orange County, North Carolina Audit Findings (Continued) • 2024-002 General Ledger Maintenance and Accounting for Fund Balance Using the County's ERP System Issue: Failure to ensure the County's GL matched the final ACFR, as well as issues with former employees (who are no longer with the County) posting journal entries in error caused beginning equity (fund balance and/or net position) of several of the County's funds to not properly roll-forward and reconcile with the prior year ACFR. Cause/Context: During the fiscal year, there were entries made in the accounting system to fund balance by former employees that are no longer with the County. These entries were made in error and were not identified and corrected in a timely manner. Effect: While the fund balance misstatement was identified and corrected during the audit process, the initial error resulted in delays in financial statement preparation as additional time was required to investigate and adjust fund balances. In total, we identified approximately $900,000 of differences that were required to be corrected between the trial balances submitted for audit and the final version used in preparation of the County's financial statements. County Response: Finance met with software technical team and remediated the issue during the audit engagement. Finance has updated our Accounting Policies and Procedure Manual to include additional monthly processes to ensure that financial statements are properly presented in accordance with generally accepted accounting principles.The new Accounting Manager has reviewed these processes with his new Accountants. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 19 Orange County, North Carolina Audit Findings (Continued) • 2024-003 Annual Financial Closeout and Preparation of Records for the Audit Issue: The County's review and manual adjustments were not sufficient to prevent, or detect and correct, material misstatements in the County's financial statements. Cause/Context: During the audit for the year ended June 30, 2024, material audit adjustments were required to correct current year balances in several audit areas: Audit adjustments totaling approximately $6,350,000 were required to properly reflect debt proceeds, debt payments, debt premiums and interest expenditures/ expenses. Audit adjustments totaling approximately $1,100,000 were required to correct the reporting of the County's capital assets. The County incorrectly expensed construction costs that were capital in nature and should have been reported as capital assets. Across several of the County's funds, issues were noted with both accounts payable and accounts receivable balances. The amounts reported in the County's general ledger did not agree and reconcile with the underlying detailed listings or subsidiary ledgers. These differences led to delays in receiving from the County staff final accounts receivable and accounts payable balances with proper documentation to support the ending balances reported. Effect: While the errors were identified and corrected during the audit, the incomplete financial close process resulted in increased reconciliation efforts from County staff, increased potential risk for misstatements, and delays in finalizing financial statements, requiring additional review and adjustments. County Response: The County acknowledges the audit finding and is committed to improving its financial reporting processes and internal controls to ensure compliance with generally accepted accounting principles (GAAP). We recognize the need for enhanced financial statement preparation, reconciliations, and timely review processes to prevent material misstatements and ensure accurate financial reporting. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 20 40w� Orange County, North Carolina Audit Findings (Continued) • 2024-004 Reporting Requirements for Section 8 Housing Program Public Housing Agencies (PHAs) are required to submit timely a Financial Assessment Sub-system (FASS-PH) GAAP- based unaudited and audited financial information electronically to HUD. In the course of performing our Single Audit testing, we noted the County had not submitted the 2023 FASS-PH report due to turnover in key positions. No questioned costs noted. The County completed the FASS-PH report and it has been submitted to HUD for 2023; additionally, the County has added this report to its annual year-end checklist going forward. Management Point (Recommendation) • Accounting for Special Revenue Funds During our review of the County's financial statements, we noted the DSS Payee Fund did not have any revenue or expenditure activity for the fiscal year under audit. Based on our review of the general ledger activity, it appears the County is still accounting for this fund as if it was still a custodial fund of the County where all amounts are received as cash and offset with a corresponding liability. With the change in accounting standard that was brought about by GASB Statement No. 84, Fiduciary Activities, this fund was reclassified to a special revenue fund in previous years and should be reflecting the inflows it receives during the fiscal year as revenues and conversely, the outflows as expenditures. Due to the fact that the activity for the fiscal year ended June 30, 2024, was not material, an audit adjustment to reclassify the activity was not required. However, we recommend County staff implement additional internal controls or additional annual closeout procedures to the ensure the amounts are properly recorded in accordance with generally accepted accounting principles (GAAP). Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 21 4)011� Orange County, North Carolina New Accounting Pronouncements • New GASB Pronouncements for Future Years Statement No. 101, Compensated Absences was issued in June 2022 and is effective for fiscal years beginning after December 15, 2023,which means the County's fiscal year ended June 30, 2025. Statement No. 103, Financial Reporting Model Improvements was issued in 2024 and is effective for fiscal years beginning after June 15, 2025, which means the County's fiscal year ended June 30, 2026. This new standard will change a few things in the County's ACFR (Management's Discussion and Analysis; presentation of budgetary comparison schedules; and the statement of revenues, expenses and changes in net position for the County's enterprise funds). • Current / Pending Major GASB Projects • Revenue and Expense Recognition is another long-term project where the GASB is working to develop a comprehensive application model for recognition of revenues and expenses from non-exchange, exchange, and exchange-like transactions. • Going Concern Uncertainties and Severe Financial Stress is major project where the goal is to address issues related to disclosures regarding going concern uncertainties and severe financial stress.This technical topic is being examined by the GASB due to a wide diversity in practice regarding required presentation on the face of the financial statements, disclosures, etc. • Disclosures Related to Capital Assets is a project the GASB added to its agenda this year as a result of the new class of assets ("right-to-use" assets) from the new standards (GASB 87, 94 and 96). The exposure draft proposes new guidance regarding the disclosure of certain items related to capital assets. Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 AAT 22 Orange County, North Carolina Govt. Clients - Free Quarterly Continuing Education • Since March of 2009 - For Over 12 Years !! Mauldin &Jenkins provides free quarterly continuing education for all of our governmental clients. Topics are tailored to be of interest to governmental entities. In an effort to accommodate our entire governmental client base, we offer the sessions several times per quarter at a variety of client provided locations resulting in greater networking and knowledge sharing among our governmental clients. We normally see approximately 180 people per quarter. Examples of subjects addressed in the past few quarters include: • Accounting for Debt Issuances ■ GASB Projects & Updates (ongoing & several sessions • Achieving Excellence in Financial Reporting ■ Human Capital Management • Best Budgeting Practices, Policies and Processes ■ Grant Accounting Processes and Controls • Budget Preparation ■ Internal Controls Over Accounts Payable, Payroll and • ACFR Preparation (two (2) day hands-on course) Cash Disbursements • Capital Asset Accounting Processes and Controls ■ Internal Controls Over Receivables &the Revenue Cycle ■ Collateralization of Deposits and Investments ■ IRS Issues, Primarily Payroll Matters • Component Units ■ Legal Considerations for Debt Issuances & Disclosures • Cybersecurity Risk Management ■ Policies and Procedures Manuals • Evaluating Financial and Non-Financial Health of a Govt. ■ Segregation of Duties • Financial Report Card -Where Does Your Govt. Stand? ■ Single Audits for Auditees ■ Financial Reporting Model Improvements ■ Special Purpose Local Option Sales Tax(SPLOST) ■ GASB Nos. 74&75, OPEB Standards ■ Accounting, Reporting & Compliance ■ GASB No. 77, Tax Abatement Disclosures ■ Uniform Grant Reporting Requirements and the New ■ GASB No. 84, Fiduciary Activities Single Audit Auditor's Discussion &Analysis (AD&A) Going Further. June 30, 2024 Questions & Comments 23 IM ORANGE COUNTY NORTH CARO INA Thank You for the Opportunity to Serve 24 LGC-205 Amendment AMENDMENT TO CONTRACT TO AUDIT ACCOUNTS Rev. 11/2023 Whereas Primary Government Unit Orange County,North Carolina and Discretely Presented Component Unit(DPCU) (if applicable) and Auditor Mauldin&Jenkins, LLC entered into a contract in which the Auditor agreed to audit the accounts of the Primary Government Unit and DPCU (if applicable) Fiscal Year Ending Date for and originally to be 06/30/24 submitted to the LGC on 10/31/24 hereby agree that it is now necessary that the contract be modified as follows. Original date Modified date ❑✓ Modification to date submitted to LGC 10/31/24 02/28/25 Original fee Modified fee ❑✓ Modification to fee $ 120,000.00 $ 135,000.00 Primary Other Reason(s)for Contract Amendment (choose 1)(choose 0-2) O ❑ Change in scope ® 0 Issue with unit staff/turnover/workload ® ❑ Issue with auditor staff/turnover/workload ® ❑ Third-party financial statements not prepared by agreed-upon date O ❑ Unit did not have bank reconciliations complete for the audit period ® ❑ Unit did not have reconciliations between subsidiary ledgers and general ledger complete O ❑ Unit did not post previous years adjusting journal entries resulting in incorrect beginning balances in the general ledger O ❑✓ Unit did not have information required for audit complete by the agreed-upon time O ❑ Delay in component unit reports O ❑ Software - implementation issue O ❑ Software -system failure O ❑ Software - ransomware/cyberattack O ❑ Natural or other disaster O ❑ Other (please explain) Plan to Prevent Future Late Submissions If the amendment is submitted to modify the date the audit will be submitted to the LGC, please indicate the steps the unit and auditor will take to prevent late filing of audits in subsequent years.Audits are due to the LGC four months after fiscal year end. Indicate NA if this is an amendment due to a change in cost only. The County experienced significant turnover in its Finance Department with key personnel with several years of experience. Additionally, a software issue with its ERP system created significant delays in getting records prepared for audit when combined with the turnover in key personnel. Additional Information Please provide any additional explanation or details regarding the contract modification. By their signatures on the following pages, the Auditor, the Primary Government Unit, and the DPCU (if applicable), agree to these modified terms. Page 1 of 3 25 LGC-205 Amended AMENDMENT TO CONTRACT TO AUDIT ACCOUNTS Rev. 11/2023 SIGNATURE PAGE AUDIT FIRM Audit Firm* Mauldin&Jenkins, LLC Authorized Firm Representative* (typed or printed) Signature* Timothy M. Lyons Date* Email Address 02/05/25 tlyons@mjcpa.com GOVERNMENTAL UNIT Governmental Unit* Orange County,North Carolina Date Primary Government Unit Governing Board Approved Amended Audit Contract* (If required by governing board policy) Mayor/Chairperson* (typed or printed) Signature* Date Email Address Chair of Audit Committee (typed or printed,or"NA") Signature Date Email Address GOVERNMENTAL UNIT— PRE-AUDIT CERTIFICATE *ONLY REQUIRED IF FEES ARE MODIFIED IN THE AMENDED CONTRACT* (Pre-audit certificate not required for hospitals) Required by G.S. 159-28(al) or G.S. 115C-441(al) This instrument has been pre-audited in the manner required by The Local Government Budget and Fiscal Control Act or by the School Budget and Fiscal Control Act. Primary Governmental Unit Finance Officer* Signature* Date of Pre-Audit Certificate* Email Address* Page 2 of 3 26 LGC-205 Amended AMENDMENT TO CONTRACT TO AUDIT ACCOUNTS Rev. 11/2022 SIGNATURE PAGE — DPCU (complete only if applicable) DISCRETELY PRESENTED COMPONENT UNIT DPCU Date DPCU Governing Board Approved Amended Audit Contract (If required by governing board policy) DPCU Chairperson (typed or printed) Signature Date Email Address Chair of Audit Committee (typed or printed,or"NA") Signature Date Email Address DPCU — PRE-AUDIT CERTIFICATE *ONLY REQUIRED IF FEES ARE MODIFIED IN THE AMENDED CONTRACT* (Pre-audit certificate not required for hospitals) Required by G.S. 159-28(al) or G.S. 115C-441(al) This instrument has been pre-audited in the manner required by The Local Government Budget and Fiscal Control Act or by the School Budget and Fiscal Control Act. DPCU Finance Officer (typed or printed) Signature Date of Pre-Audit Certificate Email Address Page 3 of 3