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Finance director halts FY24 audit sign-off pending auditor backup; new firm recommended
Summary
City finance staff said the FY24 audit is delayed because the auditor has not provided requested backup for adjusting journal entries; staff also reported a top-choice audit firm (CLA) and plans to bring a contract with a roughly $60,000 cost proposal to the Board.
City finance staff told the Budget and Finance Advisory Committee on May 5 that the fiscal year 2024 audit remains unsigned because the auditor has not provided requested backup documentation for adjusting journal entries.
Miss Holden said she has a final draft of the audit but is withholding signature until the auditor supplies supporting backup for entries that affect the financial statements. She said staff have requested that backup multiple times and will not finalize the audit until they receive it.
Committee members raised concerns about timing and consequences. Holden said the FY24 audit is months overdue—the audit for the fiscal year that ended Dec. 31 is due to the state by Dec. 31 each year—and that operating without a completed audit increases staff workload for next year, complicates grant applications and debt processes, and carries reputational and administrative penalties.
Holden said staff invited the auditor to present to the committee; the auditor cited a prior engagement and did not attend the May meeting. The committee discussed asking the auditor to present at a June meeting.
Separately, Holden updated the committee on a request for qualifications (RFQ) for audit services. She said the city opened RFQs last week, completed interviews, checked references and has a top choice: CLA, which has a Nashville office and would perform local, on-site work in the first year. Holden plans to bring a draft contract, including a cost proposal of about $60,000, to the Board of Mayor and Aldermen on May 19.
Committee members asked whether contractual payment terms can hold firms financially accountable for timeliness. Holden said the city must follow state comptroller requirements in audit contracts and that the contract is effectively a three-way arrangement with the state, limiting some enforcement options. She said she has documented communications with the current auditor and has raised expectations about timeliness with the firm being considered.
The committee did not vote on a contract at the meeting; Holden said staff will return with a draft contract and cost proposal.
