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Audit flags $218,000 cash reconciliation variance and $9.6 million school-lunch balance; council tables follow-up
Summary
Auditors told the Fall River City Council's finance committee that the FY2025 financial statements received an unmodified opinion but noted a $218,000 cash-to-ledger reconciliation variance and a school-lunch fund balance exceeding federal guidance; the committee voted to table the item pending follow-up documentation.
The finance committee heard on June 9 from auditors Rizzelli Clark & Associates that Fall River's FY2025 financial statements were issued with an unmodified (clean) opinion but included several items the city must address. Terenzio Vopicelli, the auditors' representative, said the audit identified a cash-to-accounting reconciliation variance of about $218,000 and noted that the school-lunch fund balance exceeded roughly $9.6 million — more than the three months of average expenditures that federal rules generally expect.
The auditors and city officials described the reconciliation variance as a timing and posting issue rather than missing cash. Emily Arp, the city's chief financial officer, told the committee the city "does reconcile cash on a monthly basis" and that the variance was a point-in-time difference staff expect will clear as they finish year-end work. "The money isn't missing," Arp said; "it's an accounting entry that's missing." Vopicelli said the audit team could not determine the precise cause from the records they reviewed and therefore reported it in required communications.
Councilors pressed staff on how long the variance had existed and what corrective steps had been taken. Several members said they wanted clearer documentation, with one councilor calling reconciliation of cash "probably the most fundamental financial control." Auditors explained that timing variances commonly roll from month to month and that some items could wash through subsequent periods.
Committee members also questioned the large school-lunch balance and compliance with federal guidance. Vopicelli said many municipalities reported similar circumstances after pandemic-era reimbursements and that the school department should prepare a plan for how it intends to use or reduce the balance. City officials said the balance is expected to be used for capital needs tied to the program but that they could provide more detail in writing.
After extended questioning, Council Vice President Dion moved to table further committee action on the audit so staff could gather supporting documents and written answers to the council's questions; the motion passed. The committee asked staff to provide reconciliations and follow-up responses on the $218,000 variance, the school-lunch fund plan, and MCWT (Massachusetts Clean Water Trust) interim-loan adjustments noted in the audit.
The committee's decision to postpone further action allows administration and auditors to provide more complete documentation before the council pursues any formal remedies or public follow-ups. The committee did not adopt policy changes at the meeting; it asked for written responses and supporting reconciliations to be presented to the finance committee.
