Fiscal 2024 audit finds material weakness in timing of reconciliations; town outlines corrective steps

Town auditors presented the FY2024 financial statements and a management letter to the Select Board June 24, concluding that the town’s statements are fairly presented but identifying a material weakness tied to delayed reconciliations of key accounts.

Town Finance Director David (last name not specified in the public remarks) told the board the reconciliations for cash and receivables were completed many months behind the town’s target schedule. Auditors attributed the lapse to a combination of staff vacancies, turnover in the treasurer/collector’s office and an ongoing conversion to a new financial/billing system. The audit firm recommended the town consider outside help to catch up and to adopt procedures to prevent recurrence.

Nut graf: Auditors said the material weakness reflected timing problems in internal control processes rather than misstatement of the financial results. Town officials agreed with the findings and described near-term steps to remedy the issue, including hiring external consultants to complete reconciliations and moving forward with an integrated billing/financial system.

Key points from the audit presentation - Opinion: The auditors issued an unmodified opinion that the financial statements are fairly presented in accordance with generally accepted accounting principles. - Material weakness: The auditors noted a material weakness due to delayed monthly reconciliations of cash and receivable accounts; causes cited included staff turnover and a system conversion. - Financial position: Aside from the internal-control timing issue, the auditors said the town’s financial position remained stable, with strong pension and OPEB funding levels relative to many jurisdictions (pension funding roughly mid-70s percent; OPEB funding estimated about 57%). The auditors also noted the town’s rapid debt payout schedule, a factor credit analysts favor.

Town response and next steps Town staff accepted the auditors’ findings and described actions: contracting with firms to complete outstanding reconciliations, establishing more permanent processes for timely reconciliation, and proceeding with an integrated billing/financial software procurement. Auditors and staff noted rating agencies expect financial statements to be issued within six to nine months of fiscal year-end going forward.

Why this matters A material weakness in internal controls signals a process gap that could increase risk if not corrected. Town officials emphasized the conditions were operational — not a financial misstatement — and outlined corrective steps. The Select Board and finance officials said they will monitor progress and expect the FY2025 audit schedule to return to a timelier cadence.