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Auditor gives clean opinion but flags long‑running material weakness; Lynn Water moves general ledger to Munis
Summary
Independent auditors delivered an unmodified (clean) opinion on the commission's financial statements but reported a continuing material weakness tied to a crashed general ledger system; staff described implementation of the Munis municipal financial system to address controls and workflow.
The commission received the annual audit presentation from Chris Pellen, a partner at the auditing firm Witham, who said the auditors issued an unmodified (clean) opinion on the financial statements but reported a material weakness related to the commission's general ledger software failure.
Pellen said auditors issue two reports—one on the financial statements and one on internal controls—and that the internal‑controls review produced a material weakness that has persisted for several years. He described the weakness as tied to the general ledger system crash and the commission’s temporary reliance on spreadsheets: “Excel is subject to human error,” he said, and the condition required audit adjustments. Pellen noted auditors had posted certain journal entries during the audit, including pension and OPEB adjustments, as is standard practice when management records require audit adjustments.
Commission staff described steps taken to strengthen controls. Ryan (staff member) said the commission implemented Munis, a municipal enterprise resource planning system, and went live July 2024 for fiscal year 2025 transaction processing. Ryan said Munis will centralize accounts‑payable workflow and general‑ledger posting, improving month‑end and year‑end procedures. He said the subscription costs are ongoing and can grow if additional modules are adopted.
Pellen summarized other standard audit themes: assumed risks around revenue recognition and management override, no fraud detected in audit procedures, and required supplementary information (pension/OPEB schedules) subject to limited procedures. He also described that some reporting timelines depend on state and city audit inputs—delays at the city/state level have pushed downstream timing for the commission's reports.
Commissioners asked clarifying questions about specific audit findings and the Munis rollout; staff said they expect FY25 to be fully processed in Munis and that the new system will ease audits going forward. Commissioners agreed the audit team and staff had done “great” work to get the audit completed.
Ending — Commissioners accepted the audit presentation; staff will continue to work on controls and provide updates on Munis adoption and remediation of the material weakness.
