‘Bookkeeping issue’ could impact Madison Co. credit rating, administrator says

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Published: Jun. 7, 2023 at 5:29 PM CDT
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MADISON CO., Miss. (WLBT) - Madison County’s credit rating could soon take a ding, thanks to what has been deemed “a bookkeeping issue” dating back to 2021.

The county is expected to release its audit to the State Auditor in the coming weeks.

Once that audit is submitted, the Mississippi Office of the State Auditor is expected to issue what is known as a “qualified opinion” based on findings in the report.

“The allegation is that there are some issues with some bookkeeping outside the purview of this board of supervisors,” County Administrator Greg Higginbotham said. “It is entirely outside y’all’s purview, but it’s going to happen. The qualified opinion is coming.”

Higginbotham discussed the audit’s findings at Monday’s board meeting.

Under Mississippi statute, the county is required to conduct audits every two years.

He told supervisors there are three types of opinions issued by the auditor’s office, including a “qualified opinion,” which means “the financial statements may contain material misstatements or omissions,” he said.

“Historically, the county has received what is known as an unmodified opinion, with one minor exception for failure to present component units – that’s just a cost-benefit analysis,” Higginbotham said. “It would be incredibly costly and very, very lengthy to incorporate the financials of every board, every commission, every entity that serves under this board, so that’s to be expected.”

He said the opinion could have an adverse impact on the county’s credit rating, which would mean higher interest rates on future borrowing.

“Banks tend to prefer organizations with an unmodified audit opinion,” he said. “Given the history of the county, [they] certainly don’t have to take any adverse actions as a lending institution.”

Supervisors did not discuss the issue in detail or say during the meeting where it originated from. The administrator also did not say where the issue occurred.

“I don’t believe it’s theft or anything. I think it’s a bookkeeping issue from back in 2021,” Higginbotham said. “I believe the entity that’s involved is bringing in a firm to comb through their books just to make sure that it’s correctible.”

He said if the issue is not corrected, accountants likely will revisit the issue next year when they begin work on the 2022 and 2023 audits.

“Worst-case scenario, the financial statements for 2022 come out and they make the same finding, and we are invited, or the official will be invited to respond,” he said. “And they can certainly chime in with, ‘Well, we retained x firm and it’s been fixed.’”

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