City Claims Late Audit Due to Staffing Shortage, “Projected” Completion on Halloween

The administration of Mayor Erin Stewart (R) claims that the city of New Britain failed to file a required audit more than a year after the close of its 2022 budget year because it was short-staffed in its finance office.

Yesterday, the New Britain Progressive broke the news about a stern letter from the state Office of Policy and Management, on September 12, 2023, with the subject, “Noncompliance with the Municipal and State Single Auditing Act,” because of, “Outstanding and Late FY 2022 Audit Reports.” The letter said,

This letter of noncompliance is being sent on behalf of the Municipal Finance Advisory Commission (MFAC). Statutorily, the municipality’s June 30, 2022, audit report was to have been submitted to the Office of Policy and Management (OPM) by December 31, 2022, but remains outstanding as of the date of this letter. The City of New Britain is eligible for Tier I designation under Section 7-395d of the General Statutes from not having submitted its June 30, 2022 Financial and State Single Audit Reports within 12 months of its fiscal year end.

The letter asked the city to respond on the situation by September 29, 2023.

October 4th, Stewart told a community activist that, “We did reply to OPM and let them know that we are still working on the audit with our outside auditors. They accepted the notice and we are in touch as the audit continues on. We are in compliance right now with OPM’s requests.”

The New Britain Progressive obtained the city’s response to the state by a Freedom of Information request. That message, from City Finance Director, Jonathan Perugini, was received by the state on September 29th at 5:42pm.

In that message to the state, Perugini, claimed that the city had, “massive finance office staffing shortages that started from March 2022 until May 2023.” Perugini said the finance office he leads lost three quarters of its staff from retirements and other reasons.

Perugini, whose salary appears in the most recent city budget to be $153,948, went on to claim that, “The Finance Office has 12 full time positions and only 3 of us have more than 3 full years up in Finance.” While Perugini claimed that the staffing shortage was between March 2022 until May 2023, the city budget, published in June of 2023 appears to show seven of the twelve employees with four or more years of service, and five with at least the fifteen years Perugini has.

“The anticipated projected audit completion date is 10/31/2023 for both the financial statements as well as the State and Federal Single Audit Reports,” Perugini told the state.

The city’s unaudited finances stated that the budget year ending June 30, 2022 had a “positive result” of $5,896,418.

A 2022 report by S&P Global Ratings said that the city had a surplus in the year prior to that, budget year 2021, but pointed out that this was, “reversing a trend of operating deficits since 2018,” and that the 2021, “surplus can primarily be attributed to reimbursements from the Coronavirus Relief Fund (CRF) for pandemic-related expenses,” and by “restructuring” debt to lower expenses in the short term.

Stewart has often been criticized for balancing her city budgets in the short-term by pushing debt service onto taxpayers in the future. The S&P Global Ratings report said that, the city of New Britain’s, “debt service requirements will increase again beginning in fiscal 2025.” That report gave the city’s finances a, “Negative Outlook.”

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