Independent auditors presented their review of Burlington, Vermont’s finances to the City Council this week. A key weakness is delays in reporting from the city’s clerk-treasurer’s office.
On January 23rd independent auditors for the city of Burlington submitted the annual financial report for the fiscal year that ended June 30, 2019. It is the fourth year the city compiled what is called a Comprehensive Annual Financial Report or CAFR. Monday evening city councilors heard a presentation on the report from the auditing firm Melanson Heath. Principal and CPA Scott McIntire told them it would be a basic overview and recommendations of their findings. “Tonight's objective is to give you a summary of your general fund results of operation. General Fund is of course the primary operating fund of the community. Much of our discussion tonight is going to focus on your general fund and in particular your unassigned fund balance. The second thing we'll walk through is our management letter. Based on our work we have some recommendations to improve the internal control and reporting put out by the city of Burlington.”
CPA and Principal Alina Korsak reported on changes to the unassigned fund balance and trends over the past three years. She reviewed recommendations for the city, which include recommending an internal audit of the city’s Employees Retirement system and also improving reporting for year end reports and journal entries. “We noted that even six months after year end, even in December of 2019, there were significant journal entries done in the city's general ledger and that's really late in the year. And we also noted that because the divisions and the city clerk treasurer's office were not ready the audit was delayed. So we really do recommend that the city consider hiring additional higher level staff at city clerk treasurer's office.”
After hearing the overview of the city’s fiscal status, Ward 3 Progressive Brian Pine wanted to know the basic problem to address. “What should we be focused on? Just tell us what we need to be worried about here.”
McIntire: “You need to get your books closed much faster than you presently do. Bottom line is the books aren't being closed fast enough and you're making significant entries into six months after year end. I wouldn't, I don't call them audit entries is you know your staff is still uncovering things that need to be addressed. But six months after year end you really need to target to be done by about three months.”
Pine: “Three months after the fiscal year closes?”
Ward 6 Democrat Karen Paul noted that this is the first time the auditors have noted any delay on the city’s part. “It would seem to indicate that there is something going on within the clerk-treasurer's office. I mean, six months is a very long time. And I would just ask if there is someone who can speak to that.”
City Council President Kurt Wright: “Mr. Mayor can you respond to that?”
Mayor Miro Weinberger: “Well I mean I think it's worth remembering. We're talking about a period here where we have not a permanent CAO (Chief Administrative Officer), which is a change from prior years. That ends next Monday.”
Mayor Miro Weinberger, a Democrat, continued: "Certainly the small number of recommendations in the management letter will be at the top of the list the new CAO coming in. Also, just you know, context here. I think everyone would acknowledge there were issues this year with the closing of the books. This is the same team that took us from having 27 findings 12 material weaknesses just eight years ago to the elimination of all that. So certainly there's an issue here that new CAO will address. I think we should keep the larger perspective of huge progress by this department in perspective.”
City councilors voted unanimously to accept the audit and place it on file.
Audio is courtesy of Channel 17 Town Meeting Television’s live webstream of the Burlington City council meeting.