Speaker 4 told the Finance Committee that auditors RHR Smith flagged multiple accounting problems in the FY24 management letter, including missing bank reconciliations, unposted deposits and capital-asset tracking gaps that allowed GL accounts to exceed limits. “A lot of the stuff you’re going to see noted on the management’s letter is just due to the fact that they weren’t properly accounting for things,” Speaker 4 said.

The committee heard that the city has begun corrective steps: assigning activity codes in the accounting software to track grants and projects, beginning bank reconciliations for water, wastewater and tax funds, and engaging outside help. Speaker 4 said Sue Lessard, an outside reconciliations specialist with more than 40 years’ experience, will attend the Jan. 12 finance committee meeting at 08:00 to provide a general update and answer questions.

Committee members asked about oversight cadence. Speaker 2 asked whether the committee should receive weekly, monthly or bi-monthly updates. Speaker 4 recommended bringing the audit-corrections item forward every couple of months and keeping it on the agenda during the budget cycle; several members said they preferred closer monitoring while major corrections are underway.

The timing of reconciled audits matters to budget decisions. Speaker 1 said having last year’s audit complete before the budget process would allow the council to identify undesignated fund balance and make informed off-cycle spending decisions. Speaker 4 confirmed the city drew $50,000 at closing on a bond anticipation note but will not pull additional funds until necessary, and that some capital draws are planned later in the year.

Next steps: the committee will hear Sue Lessard on Jan. 12, continue implementing reconciliations and activity codes, and maintain audit-correction updates on the committee agenda. The committee did not take a formal vote during the meeting.