Politics & Government

Finance Committee To Consider Forensic Audit

Councilors will look into requesting RFPs to look into New London finances

The City Council unanimously agreed by roll call vote on Monday to have the Finance Committee consider a forensic audit of the city finances.

The proposal, put on the agenda by Councilor John Maynard, asks the committee to consider submitting a request for proposals for conducting the audit. The committee is currently in the midst of discussions on the fiscal year 2013 budget, with proposing a 6.4 percent increase to $87,111,948 and an increase of the mill rate by 4.97 mills to 30.28.

Finizio and Finance Director Jeff Smith formerly said the city was projected to face a over three years unless steps were taken to correct it. This figure was calculated based on an audit showing a $1.3 million deficit in the 2011 fiscal year, overspending and revenue shortfalls in the current fiscal year, and a need to replace the general fund balance in the 2013 fiscal year. In his “State of the City” address, where the budget was presented, Finizio said cost-saving measures will leave the general fund at about $1 million to $2 million at the end of the fiscal year.

Find out what's happening in New Londonwith free, real-time updates from Patch.

Councilor Adam Sprecace has also called for a forensic audit and expressed skepticism at these budget projections. In February, Sprecace said he had and calculated a 2012 fiscal year deficit of about $1.1 million, which he said could be reduced to $397,000 with cost-saving measures.

Maynard also called attention to a letter from the Connecticut Office of Policy and Management to the council. The letter states that an audit of the 2011 fiscal year by the J.H. Cohn firm indicated that “certain actuarial information regarding the city’s Other Post Employment Benefits Plan is not in conformance with generally accepted accounting principles.” The office said the city did not get an updated valuation of the plan within the timeframe required under the generally accepted practices, meaning some information was not available for disclosure in the audit.

Find out what's happening in New Londonwith free, real-time updates from Patch.

The office requests that the city respond by April 23 to confirm that the audit report of June 30 will be in compliance with generally accepted accounting principles. The letter also states that failure to comply will make the city’s report subject to further review by the Municipal Finance Advisory Commission.

“Obviously we’ve got to start having better control over our finances so we have that information,” said Maynard.

The council voted unanimously to request the mayor’s office to send confirmation to the Office of Policy and Management by the deadline.

Follow us on Facebook and Twitter.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here