City gets 4th extension for FY18 audit

Posted

For the fourth time, the City of Warwick has requested and received an extension on the filing of their FY18 fiscal audit. Now the city will have until the week of July 22 to file the financial information for the fiscal year that began nearly two years ago on July 1, 2017.

Reached for comment at an event on Monday, Solomon said that requiring another extension was “disheartening.” He said that the city’s auditing firm, BlumShapiro, possesses all the necessary information from the city to file. The problem, he said, is that because of “vacations,” the firm doesn’t have the manpower to complete the work as of the most recent deadline that was set for June 30. The original deadline was Dec. 31, 2018.

Auditor General Dennis Hoyle said in a letter to Solomon dated Thursday, June 20, that he “reluctantly” acknowledged the need for additional time.

“As discussed on multiple occasions, I remain very concerned about the timeliness of the City’s financial reporting and am eager to receive a plan and commence discussion on ensuring marked improvement in the timeliness of the City’s fiscal 2019 financial reporting,” Hoyle wrote.

Reached by phone on Monday, Hoyle said he had talked to Solomon on Friday, who assured him that the audit would be filed by the new deadline.

“He assured me he'll be following up daily on the progress to make sure that happens,” he said.

The issues associated with not having a completed audit, at this point, might seem almost moot. Audited numbers are useful for ensuring that a budget can be completed with the most accurate financial data possible, including year-end projections and the accurate amount of money leftover within city reserves.

“It is imperative that the City submit the fiscal 2018 audit report no later than June 30, 2019 as the current lack of final audited operating results and fund balances impacts the reliability of projections for fiscal years 2019 and 2020.” Hoyle wrote in an earlier letter that granted the so-called “final” June 30 extension, dated June 6, 2019. “The City's fiscal 2019 and 2020 budgets utilize fund balance resources to support the budgets – ensuring such funds are available through final audited results is both prudent and necessary.”

However, Hoyle said that such delays in reporting audited figures could have other impacts on the city as well.

“Rating agencies will be looking at this,” he said. “I think they get concerned when they see delayed financial reporting.”

At the same time, Hoyle said he was still understanding that the city went through significant turnover within the finance department at the time Solomon assumed office last year.

“We're not unaware of some of the challenges,” he said. “We do understand.”

(With reports from John Howell)

Comments

12 comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment
davebarry

GET ON IT!!!!!!!!!!!!!!!!!!!!!!!!

Tuesday, June 25
Hillsgrove Hal

It sure would be great if the mayor could apply the same kind of urgency to the city audit as he did to announcing the (illegal) plan to withdraw pension contributions to balance the school budget, the (rejected) fire contract offer, and the (empty) promise to maintain school sports.

Instead, it seems that as long as he has someone else to blame (in this case, "vacations" taken by the auditing firm staff), Solomon will continue to preside over this kind of self-inflicted financial damage.

From what we've seen from him so far in the mayor's office, it will very likely take a bond rating downgrade (typically caused by things like huge tax increases, annual deficits, and late audits -- sound familiar?) for Solomon and the city council to wake up.

Even then, I don't have much faith in a group that has consistently looked for scapegoats instead of acknowledging their own roles in the current situation.

And in case anyone thinks that tax increases can be avoided, this kind of mismanagement only has two possible resolutions: Either the city raises taxes to solve its problems, or the state intervenes and does it for them.

Tuesday, June 25
warwicksmh

Time for bankruptcy. Start over. What a disaster and it keeps going on. SMH

Tuesday, June 25
SMH for sure

It IS a disaster. Anyone (like the state, apparently in their reluctance to step in and oversee which is required under the 2010 Fiscal Stability Act) who wants to spin this as simply a late audit is fooling no one.

Lets hope there are better candidates to challenge Solomon than nut cases in the next election so we have real debate, real solutions (as long and painful as they may be) and real choices.

And, we just apparently had a city council member on a reported medical issue stuff his car into Motel 6, of all places. Maybe we should move the city hall there... it goes.

Tuesday, June 25
PaulHuff

The city cannot just file bankruptcy.

http://www.ncsl.org/Portals/1/Documents/fiscal/Fiscal_meetings/Daniel_Da_Ponte_Presentation.pdf

Tuesday, June 25
FastFred Ward 4

You don,t want to go down the road of no return.

Wednesday, June 26
Patient Man

Maybe the state will take over after the audit is finally released.

Wednesday, June 26
Hillsgrove Hal

PaulHuff, thank you for providing that information. It's clear that many people think "bankruptcy" is the solution, and are under the mistaken impression that the city can just "start over."

As your link shows, there are different levels of state intervention -- and none of them resemble bankruptcy in the classic sense.

The city can't just stop paying salaries and benefits, or retiree benefits that are part of already-negotiated contracts.

What I have seen in other places, though, is renegotiation of retirement benefits that lower future costs (I think Cranston did something like this recently).

But that's something the current mayor and council should already be working on, instead of being forced to do it by the state.

Ultimately, that is the choice in front of them: Handle the issue locally or have the state do it for them.

Wednesday, June 26
Cat

So you want us to believe that because of "vacations" you haven't been able to get the report since December of 2018? That is the story you are going to go with? That is the biggest bunch of BS I have heard yet. What are you hiding? Or is it time to drop BlumShapiro and go with another auditing company that can coordinate its manpower? SMH

Wednesday, June 26
Hillsgrove Hal

Cat, this looks like another example of seniority in city government not counting for anything.

Blum Shapiro prepared last year's audit, too, when it was filed in March.

It's listed on the city's website: https://www.warwickri.gov/sites/warwickri/files/uploads/warwick_cafr_06.30.17.pdf

So, a firm that was already familiar with the city and filing audits for it suddenly needs more than six months to prepare its second audit?

Remind me again, what happened last spring that might have changed how efficiently the city reports its finances?

Wednesday, June 26
Start the FSA process ASAP

You self serving beneficiaries of the current system don't get it. Taxpayers are finally realizing that we don't want the conflicted city and school leaders and the union bosses who got us into to mess having anymore control.

Start the state intervention through the Fiscal Stability Act. That would be much better then the existing Warwick fiscal instability continuing.

Anything is better then letting all these clowns continue to destroy this city.

Wednesday, June 26
3rd party needed to save warwick unfortunately

Let the state come in and manage Warwick. Maybe they can do a better job of it than those in charge of it now . I doubt it but there is always hope, right?

Wednesday, June 26