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External auditor gives Framingham unmodified FY24 opinion; single-audit finds federal compliance gaps
Summary
External auditor Matt Hunt reported an unmodified opinion on the city's FY2024 financial statements and summarized fund‑balance and pension/OPEB positions. The single-audit identified six grant-related compliance findings and management‑letter items on water/sewer billing, IT continuity, and FEMA reimbursements.
Matt Hunt, CPA of CliftonLarsonAllen, presented the FY2024 audited financial statements and related reports to the City Council during the council meeting's audit presentation segment.
Hunt reported an unmodified opinion on the city’s financial statements, the highest available audit opinion, and highlighted general fund reserves, which grew by about $14 million to a total fund balance near $68 million, with roughly $55 million unassigned. He noted long‑term liabilities including about $308 million in bonds payable and OPEB and pension liabilities that drive a negative government‑wide net position — a common profile in Massachusetts municipalities.
Why it matters: An unmodified opinion means auditors did not identify material misstatements in the financial statements. The single‑audit report (required because the city spends more than $750,000 in federal awards) identified areas where federal grant compliance and internal controls need improvement; those findings require follow‑up and corrective action.
Single-audit and management findings: Hunt summarized six findings across federal programs: (1) missing suspension/debarment documentation for vendors used in special education and child nutrition grants; (2) adult-education payroll time-and-effort documentation missing; (3) adult-education eligibility documentation not retained; (4) a procurement sample item lacked a fully executed contract; and (5) a missing quarterly ARPA report. The management letter raised operational items including deleted water/sewer billing reports after a software update, lack of formal policies for multipliers on multi-unit meters and delayed signing of billing commitment letters, and recommended a business continuity/disaster‑recovery plan. Hunt also noted a resolved comment: an OPEB asset allocation plan was provided after the letter was issued.
Council questions and next steps: Councilor Wood asked for a breakdown of the $16 million underspending cited in the audit presentation; Finance/CFO staff said some of that represents encumbrances carried to FY25, vacancy savings, and conservative spending and that a fuller breakdown would be provided. The auditor said the retirement (pension) trust had a funded ratio improvement to 82% and that the OPEB trust increased slightly and now has about $10 million set aside. The administration and auditors agreed to deliver follow‑up materials to the council, including more detailed budget‑to‑actual explanations and the financial statements' footnotes referenced during the presentation.
