Auditor gives Scituate an unmodified opinion; report flags bookkeeping and internal-control items

Scituate Town Council heard a presentation March 3 from Damiano & Company audit manager Greg Preci, who reported an unmodified opinion on the town and school financial statements for the fiscal year ending June 30, 2024. "Happy to say that, again, this year, we presented a unmodified opinion," Preci told the council, adding that the firm also issued an unmodified single-audit opinion for the town's major federal programs.

The audit shows combined town and school results, with the general fund reporting a net change in fund balance of negative $208,005.73 and an overall combined fund balance of nearly $8 million, of which about $5 million remained unassigned at year-end. "The town does have almost $8,000,000 in its overall fund balance," Preci said during his briefing.

The management letter attached to the audit raised several operational items for the council's attention. First, auditors and council members discussed a recurring reconciliation problem between the town and school "due to/due from" balances. Preci said the issue has persisted for several years and recommended the finance office and the school department coordinate to ensure those ledger balances mirror one another.

Second, the auditors noted the tax-collector checking account lacked a maintained check register. Preci said the firm recommended moving the account onto the town's general ledger system or closing it and handling activity through the general fund. Town staff said a recent change in tax-collector personnel and software problems contributed to the inconsistency and that they are exploring software fixes and operational changes.

Third, the report flagged a negative fund balance in the Police Station capital fund of $389,567, with an additional $224,654 related to a tax-abatement matter. Council members pressed for a plan to address the deficit. Treasurer Ted (staff name in transcript) suggested the likely remedy is an allocation from the general fund or further borrowing to cover the capital shortfall, noting the town "owns the asset" and the overrun must be covered.

Council members asked whether the matters described in the management letter constituted material weaknesses. Greg Preci said they did not rise to that level based on the firm's testing: "I do not, just because the testing that we did to mitigate those risks resulted in no findings of error ... Everything that we tested ended up where it should have been." The auditor added that controls had been strengthened in some areas, including upgrades to accounts-payable/checking software and the bank's Positive Pay system.

Public commenters and council members pressed for follow-up on several specific items identified in the management letter, including written plans to eliminate the Police Station negative balance, the tax-collector register reconciliation, and the school/town interfund reconciliation. The auditor offered to provide additional reconciliations and supporting schedules to help the council and staff clarify the budget-to-GAAP differences that result from the 15-month transition year.

The council did not take formal action on audit findings during the meeting but several members asked staff for follow-up reports on remediation steps and recommended returning the topic to a future agenda for specific assignments and timelines.