Audit firm gives Coventry a clean preliminary opinion but flags internal control weaknesses and delayed reporting

The council heard a draft fiscal‑year‑2023 audit presentation from CLA (CliftonLarsonAllen) during the March 11 meeting. Auditor Leslie Zoll explained the audit scope, high‑level findings and several repeated internal‑control recommendations.

Headline finding: CLA said it expected to issue an unmodified (clean) opinion on the FY2023 basic financial statements and delivered the draft financial statements that evening for council review. CLA noted additional work remained on the federal single audit but said the financial‑statement opinion itself was complete pending final sign‑offs.

Key concerns and internal control notes: auditors reported two material weaknesses in the financial statements and two significant deficiencies over federal programs. Repeated management letter items included the need for better year‑end closing procedures, improved capital‑asset records (particularly for sewer fund assets), timely reconciliation and reporting, more robust procurement policies for federal grants and centralizing pension trust accounting. CLA also recommended an accounting procedures manual and suggested a fraud risk assessment, tip line and cybersecurity review as best practices.

What changed from prior years: CLA said some issues have improved — the prior year had six material weaknesses — but stressed the town is behind on timely reporting. The audit covered the town’s net position, with a large long‑term liability driven by pension and OPEB obligations. CLA noted municipal pension plans ranged from roughly 29%–48% funded and that other post‑employment benefit (OPEB) obligations totaled about $15.9 million as of June 30, 2023.

Budgetary highlights: CLA reported the general fund’s unassigned fund balance was about $15.5 million (13.6% of budget), property‑tax collections at 99.5% and that the school unrestricted fund had a negative fund balance (about $2.8 million at 6/30/23). The auditors emphasized that the school side’s structural deficit would require continued attention.

Council response and next steps: councilors pressed for faster on‑time reporting going forward and asked staff to pursue model policies and templates for year‑end close and controls; the town manager and finance director said they would implement a more formal year‑end checklist and work with CLA on GASB standard implementations (GASB 96 and others). CLA also listed upcoming GASB changes that will affect future reporting and offered resources and webinars for local officials.

Ending: CLA said the final, signed financial statements and the single‑audit report would be issued in the coming days after receipt of final representation letters; the council requested the management letter and was urged to consider creating a citizen advisory or finance committee to assist oversight between annual audits.