New Canaan finance department and BOE respond to audit
Published 10:28 am, Thursday, June 27, 2013
In a recent letter to the Town Council, the Board of Education issued a rebuttal of sorts to the recently completed audit, highlighting inaccuracies in the report, and improvements that had been previously made.
The town's finance department and the school district's IT department joined the Board of Education in delineating changes made to financial practices pointed out by audit firm O'Connor Davies in April.
"I think we've made it pretty apparent we had issues with the management letter, with what we thought were inaccuracies and misunderstandings," BOE Chairman Alison Bedula said Tuesday. "We felt the management letter created some misperceptions. Quite a bit of what was in that letter had already been corrected. I don't think they were as thorough in the process as they could've been. We wanted to clarify and make sure the public had some accurate info."
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The management letter in question, which was presented to the Town Council April 30 by O'Connor Davies actuary Marcia Marien relabeled about $10 million and noted several material weaknesses in town and BOE financials. Marien indicated that it was accounting processes and procedures, not individual mistakes, that must be corrected going forward.
The responses to the management letter take the issues raised by the auditors in turn, explaining what the town or BOE has done to remedy each. For example, on the issue of school lunch, the BOE responded, "The Board of Education disagrees with the auditors' finding related to the collectability of certain receivables identified in this section of the Management Letter. Receivables for catering of school events and meals for custodians are collected but were posted to revenue. Internal processes related to the recording of receivables have been updated to
correct this in future."
Town Finance Director Dawn Norton declined to speak for this article when reached by phone, but First Selectman Robert Mallozzi explained that the town has been using the management letter as a guide for making improvements.
"It's a working document. In terms of my office here, we've gone through the management letter. It's an active process," Mallozzi said.
He said the town is in the process of hiring a financial firm to assist Norton in compiling a manual of standard operating procedures for the finance department. "(We want) there to be something in place here that there's a repository of policies and procedures so that all this hard work we've done in the last year or so doesn't go away."
At the June 19 Town Council meeting, Norton referenced the town's response to the management letter, but said any Town Council member who would like more information should contact her office directly, rather than discuss it at the meeting.
"I think part of the process was to respond to (the management letter) officially," Town Councilman Steve Karl said Tuesday. "I didn't think there was anything unusual, we knew that Dawn had taken a lot of the issues and was correcting them. I think the council has a lot of confidence in what she's doing and what Rob is doing."
Some on the council members were baffled that the town agencies offered responses.
"I find the idea that you write a response to a management letter somewhat puzzling because you hire the auditor to work for you and allow the auditor into your operation in the first place," Town Councilman Roger Williams said. "The purpose of the audit it to make sure you don't have deficiencies in your system. I was taken by the almost defensive nature of this BOE response."
Bedula mentioned that part of the reason the BOE completed a formal response was to have it go into the public record at the state level. She said if anyone looks up the audit report, he or she will now also see the BOE and town's responses to it.
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