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Town audit gets clean opinion; auditors flag two accounting findings
Summary
CLA presented a clean (unmodified) opinion on West Warwick’s FY2025 financial statements but reported two findings tied to pension allocations and an omission of 2025 MERS contributions; three management-letter recommendations were also given to improve payables and school capital-asset tracking.
Steve Gross of CLA told the West Warwick Town Council that CLA issued a clean, unmodified opinion on the town’s basic financial statements for the year ended June 30, 2025. The audit used U.S. GAAP and applicable governmental auditing standards and included a single-audit of federal grant awards, which the auditors said is in its technical review phase and expected to be issued before the March 31 deadline.
Gross said auditors identified two findings related to internal control over financial reporting. One finding addressed allocation of the MERS pension plan costs between wastewater and town governmental activities and the other involved the omission of 2025 MERS contributions from the 2024 financial statements, which required opening-balance adjustments. Gross said the external auditors and the processor auditors agreed those balances should be restated and adjusted.
The firm also issued a management letter with three recommended improvements: (1) timely adjustment of incorrect balances maintained in special revenue funds dating to 2024; (2) stronger tracking and recording of school capital assets—specifically lunch‑fund enterprise assets; and (3) improved closing procedures for school capital projects to reduce client entries during and after fieldwork.
Gross summarized the town’s fund-balance picture as presented in the packet: approximately $17.6 million total fund balance, about $8.0 million in the general fund with roughly $7.89 million unassigned. He noted revenues outpacing budget by roughly $3.1 million and general‑fund expenditures also exceeding budget; the net result shown was a modest surplus of about $594,000 in the general fund. Gross said pension and OPEB liability estimates remain an area of actuarial judgment but that the disclosures were consistent and neutral.
Councilors asked clarifying questions about the pension allocations and the timing of the single-audit; Gross said management had been cooperative, there were no disagreements with management and no consultations with other auditors during the engagement. He closed by offering contact details and invited follow-up questions from council members or staff.
