The Clean Report That Wasn't
Audit Reckoning:
Report 3
—The FY2021
Single Audit Report
SCREENSHOTS OF NEW CASTLE COUNTY AUDITOR AND AUDIT COMMITTEE WEB PAGE PUBLIC INFORMATION
The Clean Report That Wasn’t
Audit Reckoning Series: Report 3
—The FY2021 Single Audit
$298 Million. Zero Findings. And a County That Called It “Fixed.”
By Karen Hartley-Nagle, Former President, New Castle County Council (2016–2024)
October 18, 2025 | Investigative Report | Audit Reckoning Series | Truthline Network
Note: The Single Audit Report referenced in this report was conducted by an independent, certified public accounting firm, in accordance with federal and state law. It was not performed by the New Castle County Auditor’s office.
The report arrived with calm ink and quiet pages — 200 lines of numbers that promised everything was fine. But $298 million moved through a system that hadn’t met its own watchdog law in years. Clean ink, dirty year.
“Clean ink can’t cover dirty habits.”
I. Previously in the series: “Audit Reckoning”.
In Report 1, we showed how New Castle County’s Audit Committee drifted from the law it swore to uphold—missing the quarterly cadence, running with three members instead of five, and leaving the public record blank for over 1,036 days. That vacuum didn’t just mute the watchdog; it invited error.
Report 2 walks into the room that silence created: the FY2020 Single Audit. It’s the first federal compliance test inside a structure that wasn’t meeting, wasn’t publishing, and wasn’t driving corrective action. The findings aren’t criminal. They are systemic—and they reveal a County that treated compliance as optional when dollars and lives were on the line.
Report 3 picks up where the paper trail tried to clean itself up: the FY2021 Single Audit. On its face, it looked spotless—no findings, no headlines, a “clean” opinion wrapped in calm prose. But beneath the varnish, the same fractures ran through the frame: an Audit Committee still short of quorum, oversight still lagging the law, and a management culture still more focused on optics than operations. The report may have balanced the books, but it didn’t balance accountability. In a year when nearly $298 million in federal funds moved through County hands, the clean audit wasn’t proof of reform—proved how silence can be mistaken for success.
“No findings on paper doesn’t mean no failures in practice.
II. The Quiet Report That Lied Loud
It arrived like calm after a storm—pages neat, language clean, the word “unmodified” sitting there like a lullaby.
No findings. No noise. Just peace on paper.
But behind that peace, $298 million moved through a system that hadn’t met its own law in years. The watchdog still asleep. The record still silent. The same hands still in charge.
A “clean” audit isn’t always a clean year. Sometimes it’s just the sound of a cover closing before anyone flips the page.
III. One Line
One line in the report said it all: “No findings.”
Two words that should mean victory—except victory needs verification.
That line ran beneath $298 million in federal awards—emergency money, pandemic money, life-line money. And the people meant to guard it still weren’t meeting, still weren’t posting, still weren’t proving.
Clean ink. Dirty year. The math worked. The oversight didn’t.
No findings on paper. Big risks in practice. FY2021 Single Audit Report carries a “clean” compliance opinion while nearly $298 million in federal awards ran through County accounts—most of it emergency cash—inside an oversight culture that (as shown in Report 1) still wasn’t meeting the law’s cadence or furnishing the public’s receipts.
“Clean ink can’t cover dirty habits.”
IV. The “fully corrected” box
The County checked three boxes: “Fully Corrected.”
It looked neat—like a student turning in homework on time. But flip the page and you can hear the pencil scratching after the bell.
“Computer glitch,” they said.
“Still checking on the number.”
“Note from the landlord.”
Those aren’t controls. Those are confessions written in management tone. The system didn’t change—the story did.
They fixed what could be seen. They never built what couldn’t be bypassed.
A box checked isn’t a problem solved; it’s a pause between mistakes.
FY2021’s Summary Schedule of Prior Audit Findings marks all three FY2020 findings as “Fully Corrected.” But the language reveals after-the-fact cleanup and workarounds, not hard-gated, can’t-bypass controls.
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HCV utility allowances (2020-001): Management calls it a “computer glitch” and says files were updated “after 2021”…“still checking on the number.” That’s remediation language, not prevention.
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HQS enforcement (2020-002): If the 30-day clock slips, the County “takes a note from the landlord” until it can confirm repairs—then abates only if later inspection fails. That’s a policy workaround, not a time-stamped proof requirement at Day 30.
“When you trade timelines for trust, you lose both.”
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CRF subrecipient monitoring (2020-003): The schedule describes corrections, including re-classing earlier activity to other sources. Accounting fixes the ledger; it doesn’t hard-wire “no subaward, no funds” gates into the ERP.
Key point: The “status: fully corrected” entries are management’s statements summarized in the Single Audit package; the absence of new findings in 2021 means the auditor didn’t report repeat problems that rose to the reporting threshold—not that every root-cause control was rebuilt to best practice and locked.
For a family waiting on a housing voucher or a senior depending on a nonprofit partner, those ‘fully corrected’ boxes aren’t lines in an audit—they’re heat, rent, and real life.
V. Anticipating the spin (and the facts)
Here’s what they’ll tell you — and what the record actually says.
You can already hear the spin.
Spin: “No findings mean no problems.”
Truth: You can pass a test you never took.
The auditors looked at one program out of more than a dozen.
A single doorway into a mansion of money.
When $298 million moves through County ledgers,
what isn’t tested isn’t trusted.
Spin: “We fixed it.”
Truth: “Fixed” isn’t a word—it’s a warranty. And this one expired the moment they called a workaround a solution.
Silence isn’t stability. It’s oversight stalled.
Spin: “No findings mean there was nothing to fix.”
Facts: A missing finding doesn’t mean a missing problem—it means a missed opportunity to measure one. In FY 2021, auditors tested only a slice of the County’s federal universe: a single major program out of more than a dozen streams. Internal control testing is scoped, not omniscient. When nearly $298 million moved through County ledgers, absence of a citation is not evidence of perfection; it’s evidence of what wasn’t examined. As any top auditor knows, you can pass a test you never took.
Spin: “Clean 2021 = problem solved.”
Facts: A clean opinion means the tested compliance met material requirements for the programs selected and at the sample sizes used. It does not mean subrecipient monitoring culture, inspection timeliness, or system validation now meet best practice across all programs—especially after a year that moved $268 million in CRF dollars with $181 million pushed to partners.
“Clean’ is a word, not a warranty.”
Spin: “We ‘fully corrected’ the 2020 items.”
Facts: Re-classing CRF to another fund source is not the same as locking a “no subaward, no funds” gate into the ERP. A landlord note isn’t the same as 30-day proof time-stamped and validated before payment. “We fixed it afterward” is remediation; prevention is a control you can’t bypass.
Spin: “Low-risk auditee = low risk.”
“Low risk on paper is high risk in real life
when no one checks the math.”
Facts: “Low-risk auditee” is a reporting status, not a culture diagnosis. It doesn’t fix a three-member Audit Committee or missing peer reviews (QARs) that the public still can’t see—gaps we documented in Report 1.
“Silence isn’t stability—it’s the sound of oversight stalled.”
Spin: “The audit proves accountability.”
Facts: An audit proves arithmetic, not accountability. The FY 2021 Single Audit verified that transactions were recorded, not that oversight was exercised. It didn’t measure whether the Audit Committee met its legal cadence, whether prior-year corrections were independently validated, or whether managers enforced the controls they promised. Accountability isn’t a line item—it’s a loop: risk identified, fix implemented, proof delivered. In FY 2021, that loop was still open, and the “clean” report simply circled the gap.
“The ink said clean. The record said otherwise.
And the man who signed off on the policies that missed their mark
now runs the entire County.”
VI. Why the clean still stains
Imagine $298 million running through a pipeline with no gauges. That’s New Castle County in FY2021—scale without dashboards, speed without steering.
When the audit lags a year behind the money, leverage dies. You can’t correct what you can’t see.
And every time management said “landlord note now, inspect later,” the County taught its partners one thing: documentation is negotiable.
A workaround today is tomorrow’s headline.
Scale without dashboards: With $297.98 million in federal awards and $184.03 million passed through, the absence of a published corrective-action tracker and risk dashboard leaves taxpayers blind to whether promised fixes are operational or aspirational.
Lag = leverage lost: Reports dated mid- and late-2022 mean any 2021 slippage rolled forward a full year before the public (or a fully seated Audit Committee) saw it. Delays shrink the Audit Committee’s leverage to force timely abatements, clawbacks, or training
Workarounds become norms. “Landlord note now, inspect later” teaches vendors that documentation is negotiable. Over time, exceptions harden into habits.
“A workaround today is tomorrow’s headline.”
VII. What a top auditor would have done
If this were a private business, any decent auditor would’ve started with one commandment: Gate the money.
No subaward, no funds. No proof, no payment.
Lock the clock. Day 31? Auto-abate.
Validate the math. No manual overrides without a double sign-off.
And shine sunlight quarterly—publish the fixes, the proof, the names.
Hope is not a control. Neither is trust.
If this were your business, here’s what your CPA would demand in 90 days.
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Gate the money: Embed “no subaward, no funds” in Finance—no voucher posts without subaward ID, UEI, pre-award risk rating, and signed terms.
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Lock the clock: For HCV HQS, auto-abate on Day 31 unless owner proof is uploaded and time-stamped; publish monthly on-time/late metrics.
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Validate the math: For HCV utilities, run 100% reconciliation after any table change; ban manual overrides outside a logged, dual-approval exception.
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Quarterly sunlight: Bring every prior-year finding to the Audit Committee with a Corrective-Action Matrix (owner, milestone, evidence, due date) until closed.
(These align with Uniform Guidance 2 CFR Part 200; HUD 24 CFR § 982.405 & § 982.517; GAO Green Book; GFOA audit follow-up best practices.)
“In audit work, hope is not a control.”
VIII. What the Audit Committee should have done
Five members, not three.
Quarterly meetings, not “whenever.”
Public minutes, not afterthoughts.
The law isn’t a suggestion. It’s the structure that keeps your dollars from falling through the cracks. And when the Audit Committee failed to meet, every dollar ran unsupervised.
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Demand live status on FY2020 fixes in Q1–Q2 of FY2021, not in a back-page schedule a year later.
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Publish the QAR/peer-review report every three years, furnished to Council and the public—on time—as the statute requires (see Report 1 context).
They didn’t just miss meetings—they missed their mission.
“No findings on paper.
Big risks in practice.”
IX. Management accountability — then and now
Marcus Henry sat at the table in 2021 as General Manager.
He sits at the head of the table now as County Executive.
A top General Manager would have locked inspections, utilities, and subrecipient controls up front, not documented workarounds, normalizing landlord notes and post-hoc ledger fixes after timelines slipped. Residents can fairly ask: if better controls weren’t enforced then, what should we expect now?
The same controls that weren’t locked then still define the culture now. A top manager would’ve built guardrails, not excuses.
Accountability doesn’t expire with a promotion.
“Accountability doesn’t expire with a promotion.”
And Matt Meyer—the County Executive who became Governor—could’ve demanded quarterly public remediation briefings on every finding. He didn’t.
The “move fast, document later” philosophy has now moved to Dover.
Tone at the top isn’t a slogan. It’s a signal.
“Tone at the top isn’t a slogan—it’s a signal.”
X. Why it matters to everyone else
This isn’t about spreadsheets. It’s about streets, schools, and roofs.
When $181 million is pushed to partners without airtight checks, the risk isn’t theoretical—it’s your neighborhood, your housing voucher, your child’s after-school program.
Late inspections mean families living in units that should’ve been fixed months ago.
Unverified partners mean tax dollars funding what no one ever saw.
Every dollar mis-tracked is a service missed.
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Dollars at stake: With $181 million pushed to partners, weak pre-award checks risk ineligible costs and clawbacks that show up years later as service cuts.
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Service quality: Late HQS verifications can keep public money flowing to substandard units; families and neighborhoods pay the price.
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Trust: A “clean” label without public dashboards erodes trust. People don’t want adjectives; they want receipts.
“Every dollar mis-tracked is a service missed.”
XI. The standard, not the spin
(best-practice yardsticks)
Best practice isn’t a mystery—it’s written in law and manuals older than some of these managers.
Uniform Guidance says pre-award vetting is non-negotiable.
HUD says inspections must be documented on time, or payments stop.
GAO and GFOA say every fix must be proven, not promised.
Transparency isn’t charity. It’s the rent you pay for power.
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Uniform Guidance (2 CFR Part 200): Pre-award subrecipient vetting (pre-award risk review, UEI, written terms) and post-award monitoring are non-negotiable.
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HUD HCV rules (24 CFR § 982.405, § 982.517): Inspection timelines, abatement, utility-allowance integrity.
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GAO Green Book & GFOA: Controls must be in-system and regularly tested, not side memos; audit follow-up needs, documented deadlines and publish the results.
“Transparency isn’t paperwork—
it’s proof that government remembers who it works for.”
XII: Bottom line
FY2021’s Single Audit looked “clean.” The year wasn't.
The County pushed an unprecedented volume of federal funds through a control environment we already know was missing legal cadence and public transparency. “Fully corrected” without system gates and public trackers is not reform; it’s a press release.
“Fully corrected” became the new “trust us.”
If you want government that treats your money with the urgency of your mortgage and the care of your child’s health plan, demand this—every quarter, in public:
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Five-member Audit Committee, on schedule.
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Posted audit plan and peer-review QAR.
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Corrective-action dashboards with proof, not promises.
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Controls that stop bad transactions before they post.
Clean ink can’t cover dirty habits. But sunlight can.
The Receipts
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FY2020 Single Audit (PDF)— New Castle County (CliftonLarsonAllen LLP)
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CliftonLarsonAllen LLP (firm site): https://www.claconnect.com
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Uniform Guidance (2 CFR Part 200) — Subrecipient monitoring: https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200 (see §200.331 in 2020; now §200.332)
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HUD HCV Regulations — Utility Allowance (24 CFR §982.517): https://www.ecfr.gov/current/title-24/part-982/section-982.517
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HUD HCV Regulations — HQS & inspections (24 CFR §982.405(b)): https://www.ecfr.gov/current/title-24/part-982/section-982.405
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NCC Press Release (Nov. 17, 2021): “Meyer nominates Carrie Casey to role of GM of Community Services.”
Sources (APA Style)
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CliftonLarsonAllen LLP. (2021, January 19). Independent auditors’ reports; Schedule of expenditures of federal awards; Schedule of findings and questioned costs; Corrective action plans: New Castle County, Delaware—Single Audit, year ended June 30, 2020 (Findings 2020-001 utility allowance post-conversion errors; 2020-002 HQS documentation and timing; 2020-003 CRF pre-award/subaward failures; SEFA totals: $59,587,211; CRF: $29,826,253; HCV: $16,244,991; EPA SRF: $8,281,030; Pass-through: $2,259,760; dashboard implemented: June 29, 2020; policy documentation due: May 30, 2021).
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U.S. Department of Housing and Urban Development. (2020). Housing Choice Voucher Program regulations, 24 C.F.R. §982.517 (Utility allowance) and §982.405(b) (HQS inspections and abatement).
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U.S. Office of Management and Budget. (2020). Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), 2 C.F.R. §200.331 (FY2020 subrecipient requirements; now recodified at §200.332).
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New Castle County Government. (2021, November 17). Meyer nominates Carrie Casey to role of GM of Community Services [Press release]. https://www.newcastlede.gov/CivicAlerts.aspx?AID=2086
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U.S. Government Accountability Office (GAO). (2014). Standards for Internal Control in the Federal Government (GAO-14-704G).
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Government Finance Officers Association (GFOA). (2020). Best Practices in Internal Control and Audit Follow-Up.
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New Castle County Council Audit Committee Agendas and Minutes (2021–2025). Retrieved from Audit Committee Page.
Read full documents → Sources above
Audit Reckoning Series | Report 1 | Report 2 | Report 3
© Karen Hartley-Nagle | The Truthline Network | www.karenhartleynagle.com
Attribution
Content and analysis © 2025 The Truthline Network, a division of Nexus Innovation Group LLC.
All content authored by Karen Hartley-Nagle — Founder & Publisher, The Truthline Network; Editor-in-Chief, Host & Executive Producer, The Truthline (Radio & Live); Former President, New Castle County Council (2016–2024); Founder & CEO, Nexus Innovation Group, LLC.
Excerpts, data, or quotations may be reproduced for noncommercial use with attribution to The Truthline Network and a direct link to the original report. Commercial use or republication requires written permission.
Cite as: “The Clean Report That Wasn't,” The Audit Reckoning Series: Report 3, The Truthline Network (October 18, 2025). https://www.karenhartleynagle.com/the-million-dollar-omission-audit-reckoning-report-4-truthline-network
“Transparency isn’t charity. It’s the rent you pay for power.”
Timeline: New Castle County Council
Legislation Reassessment Review (R25-059)
of Tyler Technology [Seeking Audit]
May 16, 2015,
Updated May 17, 2015
April 23, 2015
July 30, 2025
The Inbox That Shook Trust
How a trove of auditor emails exposed the cracks in New Castle County’s checks and balances—and why transparency must never be weaponized.
When government watchdogs become part of the story, the public loses trust. The 2015 clash over County Auditor Bob Wasserbach’s emails exposed something deeper than an inbox—it laid bare the fragility of checks and balances in New Castle County. Ten years of correspondence with a lobbyist and business partner, released through an irregular FOIA process, raised fundamental questions: who gets to decide what the public has a right to know, and who protects that right when branches of government collide? For taxpayers, it wasn’t about football talk or golf outings—it was about confidence. Were audits being conducted independently, or influenced by political ambition and private interests? This episode was a warning: when transparency is treated like a weapon instead of a duty, the people pay the price.
Source link: Wilson, Xerxes, "New Castle County legal teams clash over making auditor emails public," The News Journal, 16 & 17, May, 2015
County Auditor Responds to Criticism of Report
County Auditor Bob Wasserbach responded Thursday to a press release released by the office of New Castle County Executive Tom Gordon calling the review a "year-long misinformation campaign".
Source link: County auditor responds to criticism of report
Damian Giletto, The News Journal, April 23, 2025
Independent Audit or Broken Trust
Councilmembers Tackett and Toole demand answers as residents question fairness, transparency, and the future of their homes.
For the first time in decades, New Castle County residents opened reassessment notices and found shock instead of clarity. Councilmembers David Tackett and Brandon Toole have now called for an independent audit of Tyler Technologies’ work, citing stories from homeowners blindsided by assessments that don’t match market reality, an appeals process that fails to deliver relief, and a troubling tilt that lowers burdens for big commercial players while raising them on families, seniors, and low-income residents. Their message is blunt: without an outside audit, public trust collapses. This isn’t about numbers in a ledger—it’s about whether people can afford to stay in their homes, and whether government works for everyone or just a few.
Source link: New Castle County Councilmembers call for independent audit of property reassessment, Town Square Live, Jarek Rutz, July 30, 2025
August 3, 2025
August 19, 2025,
Updated August 20, 2025
August 15, 2025
When Reassessment Fails, Families Pay
Two councilmembers call for an audit to answer residents’ questions, fix mistakes, and restore fairness. (R25-050)
After the first countywide property reassessment in 40 years, thousands of New Castle County families were left with shock, confusion, and tax bills that defied common sense. Councilmembers Brandon Toole and David Tackett are now demanding an audit, raising concerns that Tyler Technologies’ work went unchecked and left glaring errors unaddressed. From small businesses hit harder than big corporations, to homeowners suddenly paying eight times more on a drainage ditch, the process revealed flaws that no family should have to shoulder alone. With 5,000 appeals still waiting in the queue, this is not about politics—it’s about fairness. An independent audit isn’t just overdue; it’s the only way to rebuild trust in a system that must serve people, not punish them.
Source link: Two New Castle County Council members seek audit of county-wide property reassessment, Delaware Public Media, by Abigail Lee, Published August 3, 2025
Resolution 25-150: Listening Before Levying
Councilmembers Tackett, Toole, and Durham call for a reassessment review to put people before policies and restore fairness after 40 years of silence.
On August 26, 2025, Councilmembers David Tackett, Brandon Toole, and Dee Durham brought Resolution 25-150 before the full New Castle County Council, demanding a thorough review of the county’s first reassessment in four decades. With residents facing “sticker shock” tax bills and widespread complaints about Tyler Technologies’ opaque methods, inconsistent valuations, and a flawed appeals process, the resolution directs the County Auditor to examine every step—from valuation standards to oversight to fairness in appeals. If it had passed, the Auditor’s findings would have determined if a full independent audit was needed. As Tackett put it: “When we put people before policies and concerns before calculations, property reassessment becomes not just fair but meaningful.”
Source link: New Castle County Council members call for review of recent reassessment, Delaware Business Now, Special to Delaware Business Now, August 19, 2025, updated August 20, 2025