Finance director outlines audit timeline, reconciliation work and upcoming impact-fee study

Danielle, Franklin City’s director of finance, told council members that auditors from CLA performed preliminary field work in mid-February and are scheduled for final field work April 14–18 as part of a timeline that anticipates audited financial statements by June 30 and a presentation to council by July 22.

She said the finance office is completing reconciliations for 2024 with a target completion date of about April 4 so CLA can finish final testing in mid-April. Danielle explained the city has historically handled reconciliations manually with spreadsheets rather than using available reconciliation modules in the financial software (BSA/BS&A). She said CLA will provide guidance on improving internal controls and may help implement a more cohesive reconciliation process, including whether to adopt reconciliation software or a dual-spreadsheet workflow.

Danielle said the auditors performed performance testing on accounts payable and assisted with the Public Service Commission (PSC) report preparation for the water utility. She noted some state reporting deadlines: a preliminary municipal financial report (MFR) is due May 1 if audited financials are not yet complete, the MFR with automatic extension is typically filed by May 15, and a maintenance-of-effort report can affect state aid if not filed by July 1. She said the goal is to have audited financials completed by June 30 with final amended filings and audited opinion submitted by July 31; the city historically files by May 15 with extensions as needed.

Council members asked about software options; Danielle said the city does not currently use a BSA reconciliation module and that the deputy treasurer and others reconcile using internal spreadsheets. She said staff will work with CLA to identify a sustainable monthly reconciliation process so the city is not years behind in reconciliation work.

Separately, Danielle said staff will meet with Rupert Milke next week to draft a contract to perform an impact-fee study (excluding water and sewer, which were recently updated). The city has transferred about $3.5 million in water impact fees to date and estimates the water tower project at roughly $9 million; she said parks and water fee balances are sufficient through 2026 for current obligations.

Danielle said her department is monitoring staffing and succession risk: two senior finance staff are likely to retire within one to two years and the department will need to plan for knowledge transfer or temporary staffing if needed.