By Karen Hartley-Nagle, Former President, New Castle County Council (2016–2024)​​

October 18, 2025 ​​​​

​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.  The single audit reports are not performed by the New Castle County Auditor’s office.

​

When leaders looked away, oversight collapsed — and taxpayers were left footing the bill for a government that couldn’t balance its own truth.

​​​​​​​​​​

​Veritas semper emergit.
Truth always surfaces.​

I. The Missing Audit and the Upside-Down File

​

I didn’t find the FY2022 Single Audit Report on the County’s website—because it wasn’t there.
Months later, I received it from an insider who asked me never to reveal the source.

When I opened the PDF, every page was scanned upside down.​​

​

​

​

​

​​

​

​

​

 

 

​

 

 

 

A mistake—or a message?

 

Because anyone who tried to read it would quit before reaching the findings that mattered: a million-dollar Hope Center account, two qualified federal opinions, and a trail of concealment that stretched from community services, to the county auditor, the finance office to the top floor's County Executive Suite.

Hiding the truth had become policy — and the audit that proved it was literally turned on its head.

​

​​​

​“The audit didn’t just expose a missing account

— it exposed a missing conscience.”

​

​​​​​​​

II. 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—it was proof of how easily complacency can masquerade as compliance.​​​

​

In Report 4 of Audit Reckoning, the FY 2022 Single Audit Report (upside down PDF converted to Word and flipped) reads like a case study in what happens when leadership goes dark and accountability takes a backseat. Auditors uncovered a checking account tied to the Hope Center — holding more than $630,000 in cash and over $1 million in revenue and receivables — that was never recorded in the County’s books. Not a typo. Not a rounding error. A million-dollar account that existed, operated, and vanished from public record under the watch of Marcus Henry, then General Manager of Community Services (and now County Executive), and Matt Meyer, then County Executive (now Governor), who looked the other way.

​​​​

​

“Not a typo. Not a rounding error. A million-dollar account

that existed, operated, and vanished from public record.”

​

​

This wasn’t bookkeeping gone bad; it was a systemic breakdown of ethics and oversight. The very people entrusted to safeguard taxpayer dollars created a culture where concealment was easier than compliance and silence was safer than sunlight. The same audit found qualified opinions and material weaknesses in federal reporting — failures so serious that the County’s handling of ARPA/SLFRF and CDBG funds was flagged for risk and transparency gaps.

​

​​

III. When Leaders Looked Away

​

While the Audit Committee slept, oversight fell into free fall. The law required quarterly meetings and a five-member panel.

Instead, there were three members, no quorum, and no public records for 1,036 days.

When the watchdog goes dark, it isn’t silence —it’s a cover.

​

​

IV. A Pattern of Concealment

​

The Hope Center wasn’t a one-off oversight—it was the opening act of a cover-up culture.

ON December 1, 2020, New Castle County signed a five-year Management Agreement with Hersha Hospitality Management L.P. to run the converted hotel at 365 Airport Road. The deal handed Hersha "exclusive control and discretion" over daily operations while  the County funded payroll, insurance, and working capital.  It was supposed to be a public-private success story. It became a slow-motion failure.  By late 2023, according to the County’s own lawsuit, Hersha ignored boiler leaks, overflowing toilets, holes in ceilings and walls, and a growing outbreak of mold in HVAC vents. Unqualified staff were put in charge of repairs at a facility housing Delaware’s most vulnerable families. Flooding was so chronic that one maintenance worker was cited for three separate disasters in the same month. By January 2024, the County had sent a second breach letter documenting “hundreds of thousands of dollars in property damage".

​

​When I raised these issues — in committees, (April 23, 2024 Town Square article), Council meetings, community events, an candidate forums since 2021 — the response was denial and attack. I was called political, disruptive, wrong. Then, on September 9, 2024, the day before Delaware’s Democratic Primary Election, New Castle County filed a 69-page complaint in Superior Court  against Hersha for gross mismanagement and breach of contract — echoing the same violations I had documented three years earlier: health hazards, contract breaches, and financial mismanagement — confirming everything I had said.

​

The timing was no accident. Marcus Henry (former General Manager of Community Services overseeing The Hope Center), my opponent for County Executive, was on that ballot. Matt Meyer (former County Executive), then running for Governor, was locked in a tight primary with Lt. Governor Bethany Hall-Long. The lawsuit hit was discovered by one press site hours before polls closed. 

 

Transparency  arrived only when it was politically useful.​​

​

Timeline:​

​

• September 9, 2024: New Castle County Government e-filed a 69-page lawsuit against Hersha in Superior Court at 4:06 PM

• September 9, 2024: From the Towns Square Delaware news site a lone link to the lawsuit (PDF) on the Superior Court website:  https://townsquaredelaware.com/wp-content/uploads/2024/09/NCC-v.-Hersha-Complaint-final-09.08.24-1-2.pdf​)

• September 10, 2024: Delaware and New Castle County Primary Election Candidates

• September 13, 2024: New Castle County files lawsuit against former Hope Center operator Hersha Hospitality Management Executive - Press Release  Posted on September 13, 2024.

• September 13, 2024: More News sources reported on the Hersha lawsuit after the New Castle County Executive Press Release posted.

​

By the time voters went to the polls on September 10, 2024, the hidden truth was no longer a debate — it was a docket number. The County’s own lawsuit confirmed what had been called conspiracy: that Hope Center management under Hersha collapsed under mold, mismanagement, and missing money. The audits were flipped upside down; the contract was too. And Delaware taxpayers are still picking up the tab.

​

​​

“Concealment was easier than compliance.

Silence was safer than sunlight.”

​​

​

And yet, the most damning detail may be what’s missing: as of October 14, 2025, the FY2022 Single Audit Report has still never been posted on the New Castle County government website. The one year with the most glaring financial failures so far remains the one year hidden from public view.​​

​​​

“As of October 13 2025, the 2022 Single Audit still isn’t posted.

The year that failed most is the year you still can’t see.”

That omission says more than any press release ever could. When a government hides the audit that exposes its own failures, it isn’t protecting the public — it’s protecting itself. The warning to taxpayers is unmistakable: when those in power stop showing you where the money went, it’s because they don’t want you to see who let it slip away.

​​

​

“When government hides the audit that exposes its own failures,

it’s not protecting the public — it’s protecting itself.”

​​​​​​​​​​​​​​​​​​​​​​

V. The scene

​

Picture the Hope Center’s front desk in late 2020—phones ringing, staff scrambling, lives in motion. Now picture the ledger that should have tracked every public dollar behind that lifesaving work. In 2021, that ledger missed an entire bank account tied to the Hope Center: cash of $632,560, receivables of $119,700, and $1,090,633 in revenue were left off the County’s financial statements until auditors forced corrections the following year. The cause wasn’t a mystery—it was management not notifying Finance that the account even existed.

​

That’s not a paperwork hiccup. That’s a leadership choice.

​

​

“That’s not a paperwork hiccup.

That’s a leadership choice.”

​

And FY2022, the year after, is where leadership’s choices show up in black and white: qualified opinions on major federal programs, material weaknesses in controls, and fundamental transparency failures that never should have gotten past the first staff meeting—let alone an Audit Committee.

​

​

VI. The story, from the front desk to the ledger

​​

December 2020. The County rushes to buy a hotel and stand up the Hope Center to get people out of the cold and away from COVID. Phones ring, families check in, invoices fly. In the scramble, staff open a separate checking account in the County’s name to run Hope Center operations.

​

And then… Finance is never told. The account lives outside the County’s ledgers throughout FY2021. When auditors later reconstruct the trail, they find what taxpayers should have seen from day one:

​

• Cash omitted: $632,560

• Accounts receivable omitted: $119,700

• Revenue omitted: $1,090,633

​​

The FY2021 County financial statements were misstated until auditors forced corrections in the following year’s process. The root cause the auditors record in black and white: “The accounting division was not notified that the separate account was established, nor was the finance department notified of the activity being recorded in the separate account.”​​

​

​

VII. This wasn’t a rounding error. It was a system failure—and a preventable one.

​

Every scandal starts the same way — with something small that everyone sees and no one fixes. In New Castle County, it began with a bank account. Opened in the County’s name. Used for Hope Center operations. And never reported to Finance. More than a million dollars in taxpayer money flowed through it — unseen, unrecorded, and off the books — while County leaders, then–Executive Matt Meyer and his Community Services General Manager Marcus Henry, looked the other way.

​

“Honest governments don’t lose track of seven figures by accident.

They lose them when accountability becomes an inconvenience.”

​

When auditors finally unearthed it in the 2022 Single Audit, they didn’t just find a missing account — they found a missing conscience. The report documented material weaknesses, qualified opinions, and a culture of delay that put federal funds — and public trust — in jeopardy. Only after being caught did the County rush to promise new “policies.” But policies written after exposure aren’t reform. They’re damage control with a letterhead.

​

Here’s the truth voters deserve to hear: honest governments don’t lose track of seven figures by accident. They do it when accountability stops being a value and starts being an inconvenience. This wasn’t a bookkeeping error; it was a breach of duty — deliberate, dismissive, and deeply costly. And now, the same taxpayers who were promised fiscal stewardship are paying the price again — through the Reassessment Crisis now hammering homeowners and families across New Castle County. That crisis didn’t arrive unannounced. It came with blaring sirens and red flags waving for years — warnings ignored by the very leaders who built a culture where evasion was rewarded and silence was safer than truth.

​

That culture carried both men upward — Henry to County Executive, Meyer to the Governor’s Office — while the public, still trusting, remained none the wiser.

​

Did I raise these alarms before? Yes. In council chambers. In committee meetings. Directly to the County Auditor. Repeatedly. Because that’s what I was elected to do. And I paid a high price for it — attacked by colleagues who took the same oath to serve the public, not protect each other. I saw where this was heading, and it wasn’t good for the 588,000 residents I represented.

​

Maybe people weren’t ready to hear it then.

​

The question is — are they ready to hear it now?

​

​

VIII. The Scale of the Year: Real Money, Real Risk

​

• Total federal expenditures: $73,871,423

• Treasury (CRF 21.019): $30,690,850

• Treasury (SLFRF 21.027): $9,585,374

• HUD (HCV 14.871): $16,632,099

• FEMA (97.036): $7,307,911 (includes prior-year costs recognized in 2022)

• Subawards reported on SEFA: $13,843,407 (but with classification errors noted above)

  ​

This is precisely the moment when a fully seated, quarterly-meeting Audit Committee and a disciplined audit follow-up function must be in gear.​​​​​

​​

​

IX. The Findings—What Went Wrong

(and Why It Matters)

​​

1) Financial Close & Reporting (2022-001)

— Hope Center Account Omitted (FY2021)​

A separate checking account for the Hope Center existed in the County’s name but was not recorded in FY2021: cash $632,560, accounts receivable $119,700, revenue $1,090,633 excluded until corrections. Cause cited: Finance wasn’t notified when the account was opened/used during emergency operations. Recommendation: tighten account-opening controls and communications.  Effect: prior statements were misstated; corrections later posted. 

​

Why it matters: Off-book accounts—are how governments lose track of public cash.

​

2) SEFA Reporting (2022-002)

— “Subrecipient” vs. “County” Spend Misclassified

​

On the SEFA, portions of CDBG (14.218) and SLFRF (21.027) were listed as subrecipient expenditures when in fact they were County-incurred costs, processed by a third-party manager. Totals were right; classification was wrong. Recommendation: add a second-level department review before SEFA finalization.

​

Why it matters: Subrecipient reporting drives monitoring plans, FFATA filings, and risk ratings. If you mis-tag the dollars, you mis-manage the risk.​

​

3) SLFRF Reporting (2022-003)

— Project & Expenditure Reports Didn’t Tie Out

​

SLFRF reporting (Treasury ARPA 21.027): Numbers reported to the U.S. Treasury didn’t match the County’s own support—material weakness; qualified opinion. (8 of 17 projects’ obligations didn’t tie; some projects appeared in support but not in the report; subaward data also didn’t tie.)

For 8 of 17 projects, obligations in the Treasury portal didn’t match support; 3 projects appeared in support but not in reports; expenditures didn’t tie for 3 of 17; subawards (both >$50k and < $50k) also had mismatches. Material weakness in internal control over compliance; qualified opinion for SLFRF. Management’s response cited portal updates, timing/accruals, and Treasury’s broad definition of obligation (FAQ 13.17).

​

Why it matters: SLFRF is high-visibility funding. Inaccurate portal data undermines transparency, creates clawback risk, and can jeopardize future awards.

​​​

4) CDBG FFATA (2022-004)

— FSRS Subaward Reporting Not Done

​

CDBG FFATA subaward reporting (HUD 14.218): For $1,090,268 tested, the County filed zero required FSRS reports—again a material weakness and material noncompliance with a qualified opinion on the program.

For 2 of 2 CDBG subawards tested (totaling $1,090,268), no FSRS filings were made as required by FFATA (≥$30,000 within the next month after award). The auditor flagged material weakness and material noncompliance; County promised a new process (forms at award; FSRS entry before contracting).

​

Why it matters: FFATA is basic federal hygiene—who got what must be public. Miss it, and you fail transparency at the front door.​​​​​

​

​

X. Receipts of Denial

• FY 2022 Single Audit Report (Obtained Privately): Material weaknesses + qualified opinions—never posted publicly.
• CARES Audit Report (11 / 28 / 2023): County Auditor Bob Wasserbach called prior audits “very positive news,” omitting the FY 2022 findings entirely .
• Audit Committee Minutes (11 / 28 / 2023): Members praised results as “remarkable,” with no mention of the off-book Hope Center account or federal qualifications .
• County v. Hersha Complaint (9 / 8 / 2024): Alleges the same issues of mold, maintenance failure, and financial mismanagement I flagged since 2021.

The pattern is mathematical: every time oversight catches up to fact, narrative overtakes evidence.

​

​

XI. What Best Practice Required (and Didn’t Happen)

For SLFRF (21.027):​​

• Lock a single source of truth ledger to the Portal; reconcile obligations/expenditures before quarterly submission; embed second-person review; retain tie-out binders.​​

• Use Treasury’s guidance to standardize obligation definitions and train staff. ​

​​

For CDBG FFATA (14.218):​​

• No subaward gets executed until the FSRS record is queued; require a pre-award FFATA packet (UEI/DUNS, subaward #, project description, officer comp rule check); audit trail timestamped. 

For Financial Close / SEFA:​

• Prohibit opening external bank accounts without Finance approval and index them in a master register; require SEFA mapping sign-offs distinguishing County vs. subrecipient spend; quarterly SEFA dry-runs.

  ​​​​

Control Frameworks that say all this out loud: GAO Green Book (control activities, information & communication, monitoring) and GFOA guidance on corrective-action follow-up and internal control environment.

​​​

​

XII. “When did Council find out?”

— the timeline that matters

​

• The FY2022 Single Audit package (covering these issues) is dated March 27, 2023.

  ​

• As of October 12, 2025, the County’s public archive lists FY2024, FY2023, FY2021, and FY2020 Single Audit reports—but no posted FY2022 Single Audit PDF in the archive where residents expect to find it. That missing link, in the very year with the toughest federal findings, is its own statement. 

• The Audit Committee agenda for April 10, 2025 includes a specific item—“Audit Memorandum – NCC Hope Center.” The Hope Center finally shows up as a dedicated agenda line nearly two years after the FY2022 audit had already documented the off-book account and the control failure.

​​

• May 10, 2024 Audit Committee minutes reflect discussion with Community Services leadership about internal-control weaknesses in related programs and a report on the County’s contract to operate the Hope Center—evidence that concerns were circulating but without a public, sustained corrective-action dashboard that tied back to the 2022 Single Audit findings. 

​​

Bottom line: The audit flagged it in March 2023; the public is still clicking past a missing FY2022 link in October 2025; and detailed discussion at the committee table shows up prominently only later. That’s not urgency—that’s lag.

​

​

​XIII. Exhibit A — What Council Was Told

From the CliftonLarsonAllen slidedeck presentation to New Castle County Council, May 1, 2023 (report date March 27, 2023).

​​​​​

This was the moment the missing million became public — months late, wrapped in soft language, and delivered by an auditor more interested in calm than clarity.​

​

They called it a ‘deficiency.’ Next year, it became a pattern.

​

​

XIV. Leadership, Lineage, and Lessons

—Who owned the risk—and didn’t fix it

​​

Marcus Henry, then—General Manager, Community Services

(now County Executive)

The 2020–2021 housing and reporting control issues trace to Community Services and its grant environment. By FY2022, the County is still correcting reporting discipline (SLFRF) and basic transparency (FFATA). A top general manager would have froze subawards until FSRS compliance, built a P&E tie-out cell, and briefed the Audit Committee in public—quarterly—until the last exception cleared. That didn’t happen.​

​

Community Services sat at the center of Hope Center operations and the federal grants that financed them. A top General Manager draws bright lines:

​

• No bank account opened anywhere in the County’s name without Finance’s written approval and index.

• No operational account runs a single day without being tied into the general ledger and monthly reconciliations.

​​

Those are day-one disciplines in public finance. They weren’t in force. The result: a million-plus in revenue and balances went unreported until auditors made it visible a year later. That’s not heroics under pressure; that’s management not doing the basics.​​​

​

​

Matt Meyer, then—County Executive (now Governor)​​

​​​

Tone at the top is policy. When an off-book account surfaces in an audit, leadership should order three things—immediately and publicly:

​

1. a County-wide freeze on opening external accounts without Finance sign-off,

2. a reconciliation sweep to ensure no other accounts escaped the ledger, and

3. quarterly Audit Committee updates, posted for the public, until closure.

​

FY2022’s material weaknesses warranted press-facing acknowledgment and a visible, time-boxed remediation plan. The public never got a sustained, quarterly progress briefing.

​

Instead, the County’s written response promises to “develop a policy related to external bank accounts.” After the fact. That’s not oversight—that’s cleanup.

​

Bottom line: When management failures are followed by promotions, culture learns the opposite of accountability.

​​​

​

“When management failures are followed by promotions,

culture learns the opposite of accountability.”​​​​​​

​

XV. What the FY2022 audit actually says

(in plain English)

​

Auditors’ finding 2022-001

(Financial Close & Reporting – Significant Deficiency):

The Hope Center checking account, opened during FY2021, wasn’t recorded. The prior-year statements were wrong until management posted corrections later. Cause: Finance wasn’t told; activity was booked outside the system. Recommendation: fix the account-opening process and the communication to Finance. Management: “agrees.”

​

But the 2022 audit didn’t stop there.

In the same year, the County tripped on two federal transparency basics:

​

• SLFRF reporting (Treasury ARPA 21.027): Numbers reported to the U.S. Treasury didn’t match the County’s own support—material weakness; qualified opinion. (8 of 17 projects’ obligations didn’t tie; some projects appeared in support but not in the report; subaward data also didn’t tie.)

​​

• CDBG FFATA subaward reporting (HUD 14.218): For $1,090,268 tested, the County filed zero required FSRS reports—again a material weakness and material noncompliance with a qualified opinion on the program.

  ​

A clean overall financial opinion doesn’t erase those failures. To taxpayers, it means: money moved, the books balanced in aggregate, but the controls that keep you safe didn’t work when it counted.

​

​​​

XVI. Why this hurts every taxpayer

(in dollars and in leverage)​

“Every dollar that disappears in the books shows up again in your tax bill.”

​​

​

• Risk of paybacks & penalties: Material-weakness-level failures in federal reporting and FFATA compliance invite federal scrutiny. That can mean clawbacks, interest, or conditional status that slows future funding for housing, emergency services, and infrastructure.

​​

• Higher cost of doing business: When controls fail, you pay for rework—more staff hours, more external audit testing, more “fix it after” effort. That’s money not going to shelters, sidewalks, parks, or paramedics.

​​

• Lost leverage with vendors & partners: If the County can’t prove obligations or report subawards on time, vendors learn delays won’t be enforced and subrecipients treat transparency as optional. That’s how prices creep and performance slips—and you pay for it.

​​

•  ​Transparency loss: Missing FFATA reports and mismatched SLFRF portal data mean the public can’t see who got what or what was promised.

​​

• Trust erosion: A year with qualified program opinions and a missing public link looks like minimize and move on. Trust doesn’t survive that—tax bills do.

​​​​

​

XVII. This was avoidable: what best-practice leaders

-do on Day 1

​​

If Marcus Henry had run Community Services like a top

General Manager:​

​

• Bank control: No department opens an external account without Finance approval, an index number, and next-day feed into the ledger. Monthly confirmations go to the Controller and the Audit Committee chair.

​

• SLFRF reporting: One source-of-truth ledger. No Treasury portal submission until a two-person tie-out binder proves obligations, expenditures, and subawards reconcile to documentation.

​

• FFATA discipline: No FSRS, no subaward. The FSRS entry is drafted at the time of award recommendation; contracts cannot route without it.

​​​​

If Matt Meyer had led like a top executive:

​​​​

• Public CAP (Corrective Action Plan) in 30 days: Owner, milestone, evidence, due date—posted and updated quarterly at the Audit Committee.

​

• County-wide control memo: Reaffirm bank-account policy, ledger integration, and federal reporting standards; require written certifications from each General Manager.

​​

• Open-records standard: Post the FY2022 Single Audit package in the same archive as other years and brief Council on camera—no exceptions.​​

​

​

​​XVIII. What a Top Auditor, Committee, and

General Manager Would Have Done

Top Auditor

​

• Publish a 2022 Federal Risk Map keyed to SLFRF/CDBG; embed P&E tie-out testing as a standing procedure; require FSRS evidence before subaward disbursements; report slippage to Council within 30/60/90.

• Maintain a public Corrective-Action Matrix until independent verification is complete.

​​

Audit Committee

​

• Be five, not three. Meet quarterly or more. Post minutes on time. Demand FFATA and SLFRF reconciliations as standing agenda items.

• Require QAR/peer review results to be furnished and posted on time.

​

General Manager (Community Services)

​

• SLFRF: One ledger, one owner, two-person review, quarterly certifications.

• CDBG: No FSRS, no contract.

• SEFA: Department sign-off on subrecipient vs. County spend; crosswalk lodged with Finance pre-close; training updated annually.

​​​​

​

​

​XIX. The Cover Story

​

At the Audit Committee Meeting on November 28,  2023, County Auditor Bob Wasserbach presented his CARES Act Report. He called the earlier single audits “very positive news,” noting that CARES funds weren’t tested in 2022 or 2023 because the prior years had no findings. He didn’t mention the missing FY 2022 Single Audit that showed material weaknesses and qualified opinions. He didn’t say that his office had also performed audit work on Hersha Hospitality’s contract — the same contract later described in court as “gross mismanagement of the Hope Center.

​

In that meeting, members called the results “remarkable.” The CARES report praised “positive Single Audit results” while thanking the Executive Office, Finance, and Law for “cooperation and achieving positive results.” It read like a victory lap written in advance.

The year of qualified opinions was erased from the record, and the Hope Center’s real audit became an unspoken file on the server nobody would open.​​​​​

​

​

XX. Anticipating the spin (and the facts)

​

Spin: “It was a pandemic—speed over paperwork.”
Fact: The off-book account wasn’t disclosed to Finance. Speed doesn’t require secrecy; it requires controls that work at speed.

​

​Spin: “CARES wasn’t even tested in 2022–2023—that shows confidence.”
Fact: The County Auditor’s own memo says CARES wasn’t selected because prior-year results were “positive” and FY2022–2023 dollars were lower—a selection decision, not a universal thumbs-up. Meanwhile, FY2022 produced material weaknesses and qualified opinions in other federal programs (SLFRF, CDBG). Testing choices don’t erase those failures.

​​​​

Spin: “We still got unmodified financial opinions."

Fact: You also got two qualified federal program opinions (SLFRF and CDBG) and material weaknesses—the highest severity in federal compliance. A clean financial opinion does not mean effective compliance controls.

​

Spin: “2022’s financial statements were clean."

Fact: The financial opinion was unmodified, but the federal compliance opinions for CDBG and SLFRF were qualified due to material weaknesses. That’s the highest severity short of pervasive failure.

​​

Spin: “We’re fixing it now.”
Fact: Creating an FSRS account and adding a second review in 2023 after auditors flag non-reporting proves the control did not exist when $1.09M in CDBG subawards went out in 2022. The public deserved the control before the money moved.​

​

Spin: “The portal kept changing.”
Fact: The audit says controls “were not operating effectively” and that reported figures didn’t agree to support. Process beats portal—every time.

​

Spin: “The portal kept changing; Treasury’s ‘obligation’ definition is flexible."

Fact: Treasury’s guidance requires accurate Project & Expenditure data; recipients must maintain controls that tie reports to support. Flexibility ≠ free-for-all. ​​

​​

Spin: “We’ve fixed FFATA going forward.” (Federal Funding Accountability and Transparency Act (FFATA))
Fact: FFATA has been in force for years. A brand-new fix in 2023 proves the control did not exist when it mattered in 2022. 

​

Spin: “These were administrative oversights.”
Fact: Material weaknesses are not “paperwork.” They are systemic failures that create real financial, legal, and reputational exposure.

​

​​

XXI. What the Audit Committee and Auditor should have done for you

​

• Be five, meet quarterly, post the minutes. (Not sometimes—every time.)

• Run a standing, public dashboard until every FY2022 finding is independently verified closed.

• Escalate 30/60/90: If any remediation slips, the Auditor briefs Council in open session.

​​

Instead, residents had to piece together the picture: a hard audit dated March 2023, a missing 2022 link in the public archive two years later, and committee agendas that take up the Hope Center in April 2025. That’s the opposite of sunlight. 

​

​

XXII. The Standard, in One Sentence​

​

“Good governance isn’t partisan — it’s procedural.”

Good governance isn’t partisan—it’s procedural. Quarterly means quarterly. FSRS means FSRS. Treasury reports must tie. SEFA must classify correctly. The ledger is the truth; the portal is the window.

​​

“Compliance isn’t red tape. It’s your seatbelt.

We just found out what happens when leaders drive without it.”

​

​

XXIII.  Cost of Silence

​

The Audit Committee didn’t just miss meetings — it missed its moment to protect the public. The County Auditor didn’t just omit a bad year — he rewrote it. And the leaders who once mocked my warnings now stand at the center of a lawsuit that validates every one of them.

​

When a report is scanned upside down, that’s not a clerical error. It’s a metaphor. Transparency didn’t fail by accident — it was flipped on purpose. The real question for New Castle County taxpayers is whether anyone in power will ever turn it right-side up again.​​​​​​​

​​​

​

Key Documents & Source Links (for readers)

​

• New Castle County—FY2022 Single Audit Report (CliftonLarsonAllen LLP). Finding 2022-001 (Hope Center bank account omitted), 2022-003 (SLFRF reporting—material weakness), 2022-004 (CDBG FFATA—material weakness), management responses and corrective-action plan; audit report dated March 27, 2023.

• Deck presented to Council: “Annual Audit Presentation – CliftonLarsonAllen – May 1, 2023”.

• Exhibit A — CLA “Audit Results” briefing to Council (May 1, 2023). Slide cites Single Audit report dated March 27, 2023; identifies Hope Center omission and federal-program reporting weaknesses.

• Audit Committee agenda (April 10, 2025)—lists “Audit Memorandum – NCC Hope Center.” 

• Audit Committee minutes (May 10, 2024)—discussion with Community Services leadership on internal-control issues and Hope Center operating oversight. 

• County archive pages (as of Oct. 18, 2025), (Single Audits/ACFR)—FY2024, FY2023, FY2021, FY2020 Single Audits posted; FY2022 Single Audit not listed in the public archive alongside those years. No FY2022 Single Audit Report link appears as of Oct. 18, 2025

• U.S. Treasury — SLFRF Compliance & Reporting (overview & P&E User Guide/obligation guidance). 

• FFATA / FSRS Requirements (SAM.gov/FSRS, NIH/HRSA explainer pages). 

• GAO “Green Book” (Standards for Internal Control in the Federal Government).

• GFOA Best Practices (Internal control environment; corrective-action follow-up).

​​​​​​​​

​

Sources (APA)

​

• CliftonLarsonAllen LLP. (2023, March 27). New Castle County, Delaware—Single Audit, year ended June 30, 2022: Independent auditors’ reports; Schedule of expenditures of federal awards; Schedule of findings and questioned costs; Corrective action plan. (Findings 2022-001/003/004; Hope Center omission; SLFRF and FFATA issues.)

• New Castle County, DE. (2025, April 10). Audit Committee Meeting Agenda (Item III: Audit Memorandum – NCC Hope Center). 

• New Castle County, DE. (2024, May 10). Audit Committee Meeting Minutes (discussion of Community Services controls and Hope Center operations). 

• New Castle County, DE. (Accessed Oct. 15, 2025). Archive Center—Comprehensive/Annual Financial Reports & Single Audits (FY2020, FY2021, FY2023, FY2024 listed, FY2022 not listed). ​

• U.S. Department of the Treasury. (2024, July 1). SLFRF Project & Expenditure Report User Guide.

• U.S. Department of the Treasury. (2022–2025). SLFRF Compliance & Reporting Guidance / Final Rule FAQs (obligation definition & updates). 

• U.S. General Services Administration. (n.d.). FSRS (FFATA Subaward Reporting System). 

• National Institutes of Health; Health Resources & Services Administration. (2010–2025). FFATA reporting requirements (first-tier subawards ≥$30,000; executive compensation thresholds). 

• U.S. Government Accountability Office. (2014; 2025). Standards for Internal Control in the Federal Government (Green Book). 

• Government Finance Officers Association. (n.d.). Internal Control Environment; Internal Control and Management Involvement / Corrective-Action Follow-up. 

• CliftonLarsonAllen LLP. (2023, May 1). New Castle County, Delaware: (SlideDeck PDF) Audit results for the year ended June 30, 2022. (Report date: March 27, 2023). County of New Castle, Delaware.

• New Castle County Auditor’s Office. (2025, April 10). Audit Memorandum – NCC Hope Center. County of New Castle, Delaware. 

• New Castle County Auditor’s Office. (2025, April 10).  Audit Reports. County of New Castle, Delaware. 

• County of New Castle, Delaware. (2024–2025). Budget and legislative materials referencing audit delays and Hope Center reporting issues. 

• Spotlight Delaware. (2024, April 24). New Castle County to manage Hope Center after audit. 

• Delaware LIVE. (2024, April 25). New Castle County to manage Hope Center after audit.

• Delaware Business Times. (2024, September 13). New Castle County files lawsuit against former Hope Center operators. 

​

​Note: The FY2022 Single Audit details and all quoted finding labels/conditions are drawn from the County’s own audit package and corrective-action plan.

​

Read full documents → Sources above

​

Audit Reckoning Series  |  Report 1  |  Report 2  |  Report 3  |  Report 4  

​

​​​

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 Million-Dollar Omission,” The Audit Reckoning Series: Report 4, 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.”

​