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02/06/2019 11:01 PMConnecticut state law mandates that every municipality, by Dec. 31 of each year, submit an audit of its finances. The audit, conducted by a certified public accounting firm, reports on the town’s financial statements and our compliance with laws and regulations, procedures, or management practices as well as the strength of our internal controls over financial reporting. Any weaknesses are identified and reported to the town and its governing boards, typically the Board of Selectmen and the Board of Finance, in the form of a Management Letter.
The Management Letter can discuss uncomfortable topics. The City of Hartford recently received its audit report, which identified insurance payments made over the years to ineligible dependents of town employees in an amount more than one million dollars, money that is unlikely to be recovered. Here in Old Saybrook, previous management letters have identified issues that don’t involve the loss of funds but instead concern internal controls, information technology, and purchase orders.
In my 11 years on the Board of Finance and now seven years as first selectman, I have participated in 18 town audits. Every year, our auditor has identified an area that needs improvement, frequently citing best practices. This year, the Town of Old Saybrook municipal audit did not warrant a management letter and received “clean” opinions on all our major funds. This is by no means an easy accomplishment and is entirely due to attention to detail and a constant desire to improve upon the prior year’s results. We have made significant changes in how the town does business: implementing a purchase order system, a new accounting system, in-house payroll, and, due to attrition of personnel, a reorganization of our accounting office. The systems and technology available to our team in Town Hall, and their ability to use it at its highest level, means town revenues (your tax dollars) are being managed to the highest level possible.
The manual processes of years past, which led to multiple errors across departments, are gone. The transparency of our system also means the public has more information available, much of it accessible through the town’s new and improved website. One of the more important projects over the last few years was implementing the Uniform Chart of Accounts (UCOA). UCOA is a requirement issued from “on high” (the State of Connecticut), which mandates that towns and cities track expenditures in standard categories. The beauty of this system, in theory, is that it allows a taxpayer in one town to be able to compare the cost of services to another town. Old Saybrook complied. This is an expensive mandate, frequently requiring and investment in information technology and sometimes a consultant to assist. While the vast majority of towns don’t comply, Old Saybrook does. Again, our town has made the upfront investments to best track tax dollars. That allows anyone who would like, including our auditors, to be very pleased with the results.