Saying they don’t want to be associated with New Canaan’s financial statements, members of a committee that town officials appointed last summer in order to help oversee financial reporting for the municipal government and school district said late Tuesday that they’re suspending their work.
The five members of the Audit Committee, including two alternates, said in a letter sent to the first selectman and Town Council that they “have no reason to believe the systems of internal control at both the Town and the Board of Education are adequate nor have recommended improvements been implemented.”
“Communication between the finance department of the Town and the Board of Education has not been adequate. This has resulted in un-reconciled accounts dating back several months. In addition, the Town CFO’s access to the Board of Education books and records, accounting and control systems, is not at an appropriate or adequate level. Without resolution, this would likely prohibit the Town’s CFO from making required representations regarding those controls and records to the Town’s external auditors.”
The committee will cease its activities Nov. 1, the letter said, and could resume if several changes are made. Those include specific changes as well as progress in the relationship between the town and Board of Education and a “clear demonstration from the Town Council and Board of Selectmen and Board of Education that the Audit Committee has appropriate support.”
The Board of Selectmen appointed the group—its members include Ed Kangas, Bill Parrett, Charles Jacobson, George Maranis and Janet Lanaway—in July 2014 following several months of development. The committee was charged with helping municipal departments with financial reporting, such as in an annual independent audit, as well as compliance with legal and regulatory requirements.
According to the committee’s letter, “a recommendation for extended audit procedures in the Tax Collector’s Office has not been implemented.”
“These serious deficiencies and others, which remain uncorrected despite frequent requests, renders the Audit Committee uncertain as to its role and puts the Audit Committee in a position of not wanting to be associated with the issuance of the Town’s financial statements,” the committee said. “We caution the Town Council about releasing the financial statements until these problems have been remedied.”
In their letter, the Audit Committee’s members also say they’re “concerned about the breadth and depth of the accounting staffs at the Town and the Board of Education.”
“There is a need for internal audit capabilities, capabilities to address ‘Whistleblower’ complaints, as well as timely implementation of improved controls, and reconciliations. And finally, we have observed that the level of cooperation, trust and transparency between the Board of Education and the Town is simply inadequate. It needs dramatic improvement.”