CBIZ presents draft FY2023 audit; auditors flag internal-control weaknesses and clarify fund-balance items

CBIZ auditor Jim Wilkinson presented the draft fiscal-year 2023 audit to the Woonsocket City Council on May 12, 2025, saying the financials were largely accurate but that a few line-item reclassifications and internal-control improvements are needed before finalization.

Wilkinson told the council the draft shows a general-fund increase in fund balance of about $275,000 for the year but noted the unassigned fund-balance number in the draft ($9,900,000) will be parsed into restrictions and encumbrances before the statements are finalized. He described the draft as a near-final product that still requires coordination with city and school management and with state reporting requirements.

"Largely, the numbers that were presented to us for audit were correct and not require adjustment," Wilkinson said. He also flagged internal-control deficiencies tied to year-end closing procedures and IT user controls and recommended more timely reconciliations and a stronger segregation of duties in the city's cloud-based ERP systems.

Key points from the presentation and council discussion:

- Fund balances and revenues: The draft reported general-fund revenues of about $81.4 million and noted that property-tax revenue was lower than the prior year partly because motor-vehicle tax collections moved through state aid in that period. Wilkinson said the unassigned fund-balance figure would be reclassified to account for encumbrances and legally restricted amounts before final issuance.

- ARPA and other federal funds: The draft shows approximately $30 million of unspent federal American Rescue Plan Act (ARPA) funds at year-end, with $5.4 million expended during the year. Auditors noted federal rules govern the allowable uses and obligation deadlines.

- Enterprise and other funds: The water, regional wastewater and user-charge funds showed modest increases in net positions in the draft; the school lunch fund had a modest decrease and remains within federal guidelines for fund balance.

- Pension and OPEB: The standalone pension plan decreased net position by about $3.29 million to an ending net position of roughly $21.5 million at June 30, 2023. Wilkinson noted an estimated net pension liability of about $50 million and emphasized the need for continued actuarially required contributions. Auditors reviewed the discount-rate assumption and called for adherence to periodic actuarial experience studies.

- Internal-control findings: The draft will include material weaknesses related to IT (user privileges and third-party SaaS controls) and recommendations for more robust monthly reconciliations and a documented year-end close schedule. Wilkinson urged management to review third-party control reports and to restrict administrative privileges to IT staff to reduce incompatible duties.

Council members asked when the audit would be finalized and submitted to the state. Wilkinson said the report is going through review and that the administration would work with auditors to submit the municipal transparency portal schedules to the State Department of Administration. He and staff also discussed planning for the FY2024 audit and issuing an RFP for FY2025 audit services.

Next steps: CBIZ will prepare a final draft with required reclassifications and formal findings; management will supply responses and corrective-action plans; the draft will be finalized for council acceptance and state filing. Wilkinson said auditors could return for a follow-up presentation once the final report and management responses are prepared.