Danbury audit update: RSM says 2023 report likely early January; city to seek short extension

Frank Salvatore, chair of the ad hoc audit committee, convened the meeting to get a status update on Danbury City’s 2023 financial audit and to hear RSM’s timeline for finishing the report.

The auditors said the audit is in a late testing and review stage but not yet finished. Scott Bassett of RSM said the firm had multiple people working the file and had just received valuation work that must be routed to actuaries for review. “I have 8 people working through the file right now at 06:00 on a Tuesday evening,” Bassett said, adding that the firm’s partner review and other professional steps mean a final file is unlikely before a short review period completes. He said an optimistic target was the end of December but that, because of holiday schedules, “in a realistic world” he expects completion “within the first week or two of January.”

Why it matters: a completed 2023 audit is needed for the city’s year-end financial reporting and to restore the normal cadence for future audits. Committee members repeatedly pressed whether outstanding selections or missing documents would delay issuance; Bassett said many selections are small and that the audit team should be able to process them promptly once they are provided.

City staff and the board of education’s finance representatives described steps they have taken to accelerate work. Staff reported that the shared portal used to manage auditor requests contains hundreds of requests overall and that the parties have reduced outstanding items; at one point the portal showed about 548 requests and staff told the committee there were 14 outstanding items remaining between the city and the board of education. Staff also said the OPEB disclosure package and other valuation reports have been delivered to auditors, which will allow RSM’s actuaries to complete their procedures.

Several committee members asked whether the January timing would be a draft or final report. Bassett said he expected a working draft within about a week after trial balances are finalized and that the full audit (the city’s audit runs roughly 250 pages) will require partner review and some time for rework: “It’s a 250 page audit, so we’d want to have people working on it for a few weeks,” he said.

On controls and findings, Bassett told the committee he had not identified new material misstatements at this stage but expects repeat management condition findings similar to 2022, particularly around timeliness of records and a high volume of journal entries.

Staff described how consultants have helped. Committee members and Taylor O’Brien, chief of staff in the mayor’s office, said CLA and other consultants have supplemented in‑house capacity, helped with reconciliations, and staffed remote reviews. O’Brien praised finance staff, saying they had been “phenomenal” and that the mayor’s office is pushing early closeout work to make the 2024 audit run more smoothly.

On extensions and next steps: Bassett confirmed the city will request short extensions from the state as needed; “They allow us to ask for 1 month extension at a time,” he said. The committee voted by voice to continue the committee at the call of the chair and the chair said the group would reconvene in roughly six weeks to review the final results.

Claims and communications: a committee member raised concern about a recent news article that the member said mischaracterized the audit schedule. The mayor’s office said it did not author the article and called it misleading; staff said they would follow up with the reporter.

What’s next: auditors expect to convert the working draft into final financial statements after partner reviews and actuary responses. City staff will continue to push items through the portal, and the mayor’s office and consultants will keep working to shorten lead times for 2024 closeout work. The committee will meet again when the chair calls the committee back.