The report from firm auditing the city of New Britain’s books found that three findings it identified from the previous year were still not remedied by the administration of Mayor Erin Stewart (R).
The audit for the 2023 budget year was completed nearly six months late, according to state law. The six month late report follows another, nearly year-late report from the previous, 2022, budget year.
The most recently completed report is on the city budget year that went from July 1, 2022 to June 30, 2023. According to state law, the report appears to have been due by the end of December of 2023.
In their report on the city’s 2023 budget year, the auditor found three problems that were not resolved from the previous year’s audit.
The auditor says it found a, “Material Weakness in Internal Control over Financial Reporting,” because, “The City’s bank reconciliations were not properly prepared and completed timely.” The auditor says that the problem created, “Increased risk of material misstatement within the financial statements.”
While the auditor says that city, “Management is responsible for establishing strong internal controls to ensure the financial statements are free from material misstatements,” it noted that the cause of the problems were, “Shortage in staffing within the finance department and lack of a formal financial close process.”
The auditor also identified a repeat problem with, “Fiscal Year-End Close Procedures,” creating an, “Increased risk of material misstatement within the financial statements,” caused by, “Shortage in staffing within the finance department to review balances and lack of a formal financial close process.”
The auditor recommended that that, “the City develop a formal financial close process to ensure each fund’s year-end balances are analyzed timely and corrected appropriately.”
The auditor also found that, “The City did not comply with Uniform Guidance Reporting Requirements,” a problem that it said means, “The City no longer qualifies as a low risk entity for federal single audit filing.”
The auditor said that, “Uniform Guidance requires entities to electronically file required reports within nine months of year-end,” and recommended, “that the City develop a formal financial close process to ensure the financial statements of the City are ready for audit inspection to meet federal requirements.”
All three findings were from the previous year’s report and remained unresolved in the report for the 2023 city budget year.
The auditor was CliftonLarsonAllen LLP.
In January, the City Council established a Council Audit Subcommittee, which the Council’s Majority Leader, Ald. John McNamara (D-4) says is intended to assert a stronger role of the Council in selecting the independent auditors for the city and reviewing their findings.
