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Finance director cites bank‑reconciliation backlog and staffing gaps for FY24 audit delay
Summary
Finance Director Josh McNeil IV told council a five‑to‑six‑month backlog in bank reconciliations and an abbreviated staff transition delayed the FY24 audit; he outlined SOP changes, a senior accountant hire and a move toward a formal audit contract.
Josh McNeil IV, the city's Finance Director, told the governing body that the FY24 audit fell behind schedule largely because of a backlog in bank reconciliations and an abbreviated transition at the finance director position. McNeil said the city typically finishes monthly bank reconciliations by mid‑August following year‑end, but the FY24 reconciliations were not completed until late February 2025.
McNeil said the late prepared‑by‑client (PBC) list and a change in the lead auditor contributed to extended field work that continued into April–June 2025. He described three primary causes: (1) lack of a comprehensive transition plan and loss of institutional knowledge; (2) a 5–6 month backlog in bank reconciliations across roughly nine different revenue systems; and (3) a late final PBC list that relied on reconciliations. "Bank reconciliations and knowledge gap," McNeil summarized when answering a council question about the primary cause of the delay.
To address the problems, McNeil said the city is strengthening standard operating procedures, recruiting a senior accountant, using consultants to catch up on reconciliations, and moving from annual engagement letters to a formal audit services contract that clearly defines scope and deliverables. He said the goal is to complete FY24 in July and to align FY25 work to a milestone plan aiming at the Auditor of Public Accounts deadline of Dec. 15, 2025. McNeil told council the city implemented a daily reconciliation process beginning July 1, 2025 to support more timely monthly and quarterly closing.
Councilmembers pressed staff on technology consolidation and asked whether the city will centralize multiple systems; McNeil said the city is implementing financial software platforms this month and will evaluate integrations with legacy systems. He estimated the Munis automation features would be targeted for buildout around 2026.
McNeil closed by thanking council for support and said he will provide routine status updates as the audit process proceeds.
