The City Council will conduct an independent audit of the 2013 municipal budget based on the budget's third quarter.
The Finance Committee approved an item to have the auditing firm CohnReznick complete a report on the city’s anticipatd expenditures and revenues based on the figures available from the third quarter. The full Council accepted the vote as part of its consent agenda on Monday.
Mayor Daryl Finizio and the Council have been tracking the current budget in an effort to avoid running a deficit due to a depleted general fund. The Council's expenditure for the audit will be capped at $4,500.
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Councilor Adam Sprecace said the audit will help to foster transparency and trust between the Council and Finizio’s administration.
“We are currently at the mercy of the information that is provided to us by the administration,” said Sprecace.
Council President Michael Passero also said he thinks the audit will be important, saying it is a modest investment to ensure financial stability.
“I appreciate that that’s also the administration’s goal, but we’re going to put a fresh set of eyes on this,” he said.
Passero said he expects the audit will be complete in time to help the Council prepare the 2014 budget. This process will begin following Finizio’s budget proposal on April 1.
At last estimate, Finance Director Jeff Smith projected that the city was facing a due to $692,847 in revenue shortfalls and $413,995 in overspending. Smith also said he anticipates the city could find up to $1.7 million in savings, including in the New London Police Department and Department of Public Works. Smith said stopping fourth quarter payments to nonprofits could be done as a “last resort” and Finizio has said such an action is unlikely.
A preliminary audit of the 2012 fiscal year showed a depletion of the general fund from $4,979,248 at the beginning of the year to $1,262,989 at the end.
Sprecace said CohnReznick has done New London audits before and is also doing an operational audit on the finances of 10 municipal departments in the 2011 and 2012 fiscal years. Passero said the operational audit should also be completed in time to be considered as part of the budget process.