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City audit shows unmodified opinions; federal single-audit finds two internal-control deficiencies
Summary
CliftonLarsonAllen presented Norwich's fiscal 2024 audit: unmodified opinions for financial statements and federal/state single audits; two significant deficiencies in internal controls over federal procurements were reported (single-source documentation and suspension/debarment checks). Key financial highlights were also reviewed.
CliftonLarsonAllen LLP presented the City of Norwich's fiscal year 2024 audit at the Feb. 3 council meeting and reported unmodified (clean) opinions on the city's financial statements, the schedule of expenditures of federal awards and the state single audit.
Auditor David Flint told the council there were no findings in the city's report on internal control and compliance (the Yellow Book letter) and that the financial statements received an unmodified opinion. The federal single-audit portion also received an unmodified opinion on major programs, but the auditors reported two significant deficiencies in internal control over compliance related to federal procurement documentation.
Flint described the two significant deficiencies as follows: (1) single-source procurement files lacked required documentation explaining why only one source could provide a needed good or service, and (2) documentation of suspension and debarment checks for contractors paid with federal funds was missing in some files. Flint emphasized those findings were internal-control deficiencies rather than instances of improper spending; the auditors found no compliance exceptions for the grant dollars sampled.
Flint reviewed financial highlights with the council: the government-wide balance sheet shows capital assets of about $140.4 million and long-term debt of about $244.3 million, producing net position of about $35.26 million. On a fund basis, the general fund recorded a $760,000 deficit for the year, leaving an ending fund balance of roughly $20.2 million (about 13.5% of the 2024 general fund budget). Norwich Public Utilities reported a surplus of about $12.9 million for 2024.
The auditors also reported the city expended about $57.7 million in federal funds in fiscal 2024; the major federal programs audited included the Clean Water State Revolving Fund, the Special Education (IDEA) cluster and ARPA (American Rescue Plan Act). On the state side, auditors said the city expended state funds in audited programs including the Alliance District Grant and other state assistance programs; the auditors reported an unmodified opinion on major state programs and no compliance findings for the state single audit.
Alderman Hayes asked whether management had already implemented corrective steps on the two federal-procurement internal-control deficiencies; Flint said the city prepares a corrective-action plan and auditors will check compliance with that plan during the 2025 audit.
The presentation and materials will be part of the city's official audit record and made available to council and public as part of the audit packet.
