Town officials will meet tonight to discuss the recently released fiscal year 2012 town audit which includes millions of dollars worth of accounting errors.
"A number of corrections were made to the proper financial statements," according to the report submitted by O'Connor Davis LLP of Wethersfield. "These have increased the beginning net assets by a net amount of approximately $10,000,000."
In a summary of some of the results, the audit report offered an unqualified "yes" on whether "material weakness(es)" were identified in financial statements and that the report found "noncompliance material to financial statements."
"I do not have any time at all. Sorry," was the emailed response from the town's finance director, Dawn Norton, when asked to discuss the matter.
First Selectman Robert Mallozzi said Monday he was only now reading the report after having been out of town with his family for a long weekend.
"Nothing material is missing in cash, that's a positive," he said. "Revenues were greater than expenditures, so our fund balance actually increased. Most of what we're reacting to is the way (the new accounting firm O'Connor Davies) said that the way this town kept its books over the last couple of years was not the best. We are well on our way to improving the way we go about financially reporting."
Mallozzi, who was elected to the Board of Selectmen in 2007 and became first selectman in 2011, was a member of the BOS for four years under the previous administration of Jeb Walker, but said the responsibility for the audit's findings is the purview of the Town Council and first selectman.
"The audit never comes before the Board of Selectmen," he said. "I would hope the first selectman who preceded me would have gone through (it). As CEO of the town, you should be (going through it), and that's what I'm doing."
In an effort to better understand the audit, the Town Council planned a joint meeting with the Board of Selectmen and the Board of Finance for 6:30 p.m. on Tuesday, April 30, at the Nature Center, according to Chairman Mark DeWaele. The auditing firm is expected to explain the findings of the audit and answer questions at the meeting.
"We are organizing a meeting for the Town Council, the Board of Selectmen and the Board of Finance, so the auditors can come down and report all their findings to the town," DeWaele said. "At that time, we'll be asking them to include all the specifics in the audit. ... I think at the end of that we'll have a much better understanding. There are a lot of reclassifications that are going to be taken, but it's a clean opinion."
DeWaele noted that in previous discussions with O'Connor Davies, the firm told the Town Council that though there might be accounting practices that need to be changed, there would not be a restatement and republication of prior financial statements.
"A lot of what is going on is reclassifications and the reclassifications don't affect the overall financial health of the town," DeWaele said.
Several others on the Town Council had not yet completed reading the audit.
"I need to spend more time with it, but when you find statements about material misrepresentations ... You see the word `material' in an audit and that's extremely concerning," Councilman Roger Williams said. "Also, it potentially affects our bonds. We have to show we're in compliance with all this stuff. Guess what: we're not. It could open us up to exposures."
The meeting will be held at 6:30 p.m. at the New Canaan Nature Center.
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