Comptroller warns ARPA affordable-housing obligation at risk; auditors and pension returns draw BET attention

The comptroller told the Board of Estimate and Taxation that one American Rescue Plan Act (ARPA) project — an allocation to the Affordable Housing Trust Fund — could be at risk of not meeting federal obligation requirements and therefore subject to audit scrutiny. The comptroller said the town had obligated $1,100,000 to the trust fund, then “caught back about $414,000” and now the account shows “the difference of over 600,000,” and auditors reviewing eligibility under Treasury rules could require repurposing or recovery of funds.

The comptroller reminded members that the U.S. Treasury uses the single-audit process and external auditors to determine whether obligations qualify, and he recommended the BET monitor and, if necessary, consider alternate repurposing options for ARPA funds. He said an option would be to reassign funds to a preexisting project that had been obligated before the federal deadline, although that would reduce funding for the other project.

Audit schedule and financial reports: the town’s external auditors (RSM) presented the annual financial report to the audit committee and the annual comprehensive financial report (ACFR) was on the BET agenda for acceptance; the single audit remained unfinished, with RSM expected to conclude and present single-audit results to the audit committee on June 12. The board accepted the comptroller’s report and later accepted the ACFR by unanimous consent (12–0–0). The comptroller also reviewed ESSER funds (spending near completion) and described market pressure on municipal-bond yields that is affecting borrowing costs.

Pension and budget implications: BET members raised questions about how recent market volatility could affect the town’s actuarially determined employer contribution (ADEC) for the retirement plan. The comptroller reported a year-to-date portfolio return of about 1.8 percent, a current market value of about $660 million (down from a prior $700+ million figure), and a smoothing policy that spreads investment gains and losses; he said full ADEC implications will be quantified at the July actuary presentation and that any change would affect future-year ADEC calculations rather than the budget already passed for the coming fiscal year.

Board action: BET accepted the comptroller’s report and later moved and accepted the ACFR by unanimous consent. The board directed that auditors and the audit committee continue work on the single audit and that the actuary present updated ADEC estimates later in the review schedule.