Stamford’s 2022 Audit Not Filed Yet, and 2023 is Due at End of Year

Stamford Government Center (CT Examiner)


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STAMFORD – The 2022 annual audit report the city owes the state is woefully overdue.

It’s so delinquent that it’s almost time to file the 2023 audit report.

The lateness is considerable enough that Kimberly Kennison, an executive officer with the Connecticut Office of Finance, wrote a letter to Mayor Caroline Simmons on behalf of the Municipal Finance Advisory Commission.

“As a commission charged with working with municipalities to improve upon their fiscal condition and financial practices, the MFAC believes that the lack of timely audit reports is a serious matter and potentially a warning sign of financial challenges,” Kennison wrote. “Audits must be completed in a timely manner for management of the municipality, the governing board, and its citizens to make informed decisions that can be critical to the municipality’s financial plan.”

The letter, written a month ago, lists information the city must provide to avoid being designated for oversight by MFAC, made up of eight government and private finance officials appointed by the governor to guide municipalities toward fiscal health. Kennison requested information on the delinquent 2022 audit and the soon-due 2023 audit, to make sure that isn’t late, too.

By state law, the audit for the fiscal year that ended June 30, 2022 should have been submitted to the state Office of Policy and Management by Dec. 31, 2022, Kennison wrote.

Promises of audit reports

City officials promised to have the final draft before the finance board’s Wednesday night meeting, but it was delayed yet again.

Director of Administration Ben Barnes, appointed to the post a month ago, after Sandra Dennies retired, told board members they will have the report by their Nov. 9 meeting.

On Thursday Barnes said his office “provided a near-complete draft” for Wednesday’s meeting. The board, however, declined to discuss it, preferring to wait a month for the complete draft.

Barnes said the final draft is missing analysis, and checklist items “related to complex issues” involving dissolution of the Old Town Hall Redevelopment Agency, accounting for federal grants received under the American Rescue Plan Act, and other items “that require some back-and-forth to resolve.” 

There is some good news about the audit report, Barnes told the finance board. Though still a draft, the report indicates a surplus of almost $14 million, slightly higher than was anticipated.

“The audit shows a strong result,” Barnes told the board.

But he is concerned about the 2023 audit, Barnes said. It’s due Dec. 31, only seven weeks after the 2022 audit is to be presented.

Bring in another firm

So Barnes Wednesday asked the finance board for help preparing the 2023 audit. He requested that members approve the transfer of $75,000 to the controller’s budget from sister departments in the Office of Administration to hire an outside firm to analyze and reconcile accounts, and implement procedures to ensure timely, accurate financial reporting from now on. 

Board members approved the transfer, which will be used to pay CliftonLarsonAllen to work with the controller’s office and tax department through the end of the year.

CliftonLarsonAllen was contracted in the past to prepare the annual audit, and also was late, though to a lesser extent.

The firm now under contract the prepare the audit, RSM, has said city departments do not regularly reconcile accounts and complete other functions that would allow them to close the books in time to complete the current audit by June 30, and would allow them to tackle the next audit soon after the new fiscal year begins July 1.

Under its contract, RSM is paid $345,000, Barnes said Thursday. RSM has been paid an additional $86,250 because of the additional time city departments needed to complete the financial reporting.

“There may be additional invoices forthcoming, but I am not aware of that now,” Barnes said. 

The Board of Finance’s Audit Committee, led by longtime member Mary Lou Rinaldi, who has been pushing for the audit to be completed all year, has said the fault lies with the city, not the outside auditors.

Barnes has agreed, saying Stamford’s financial reporting troubles stem from recent departures of key employees in the controller’s office, who were replaced with people who did not know city procedures. He also cited the switch from old computer software, HTE, to Oracle, and significant mistakes by a subcontractor that set up the work plan under the new computer system.

Barnes told the finance board he is assigning Teresa Viscariello, the city’s internal auditor, to examine the system. Viscariello said during the meeting that she is concerned about tax collection.

“It’s half a billion dollars in revenue,” Viscariello said. “It goes hand in hand with the most critical area of the audit … so I would like it to be my first project.”

Rinaldi agreed.

“The tax department wasn’t reconciling their accounts on a regular basis. Tax money comes in every month, so not doing a weekly or monthly reconciliation – only doing it at the end of the year – is, of course, going to cause problems. It affects everything.”

Five or ten vs. 125

Rinaldi said she spoke with RSM auditors and learned that when most cities present their information for review, they are missing maybe five or 10 data entries. 

“Stamford had 125 entries that had to be created or corrected,” Rinaldi said. “It indicates that city departments are not audit-ready when they should be. For years in Stamford we’ve talked about a lack of internal controls. The city always says, ‘We’re working on it.’ But it’s a redundant comment year after year. To say we will do better next year is no longer enough.”

The city has a history of AAA credit ratings, the highest possible, from Standard & Poors and Fitch. Officials are concerned about that now because the city is undertaking a $1.5 billion plan to rebuild and repair schools. The higher the credit rating, the lower the interest on the loans the city will need to fix the schools.

Besides the rating agencies, state officials, banks, underwriters and others are watching what happens with the audit report, Rinaldi said.

According to the state Office of Policy and Management’s Electronic Audit Reporting System, Stamford is the only large city that has failed to file its audit so far. 

Waterbury filed Dec. 22. Bridgeport and Hartford filed Dec. 30. Norwalk filed shortly after, on Jan. 3. New Haven was significantly late but filed July 24.

OPM’s website shows that, as of Thursday, Stamford is among 12 of Connecticut’s 169 municipalities that have not fulfilled the mandate to file an annual audit. Danbury also has not filed.

“It doesn’t give our citizens confidence to know that we can’t get  our financial reporting in order,” Rinaldi said. “The banks are asking why our audit isn’t done, the rating agencies are asking, the state is asking. We hear that the city is doing well, but we don’t have the reporting to confirm it. It’s important for us to have that.”

Angela Carella

For 36 years prior to joining the Connecticut Examiner, Angela Carella was a beat reporter, investigative reporter, editor and columnist for the Stamford Advocate. Carella reports on Stamford and Fairfield County. T: 203 722 6811.