New Canaan for the first time since forming an Audit Committee to ensure proper financial controls are in place is no longer operating with “material weaknesses,” a member of the group said Wednesday morning.
The town also has given full access to its elected treasurer and “we don’t have people signing checks that are unauthorized to sign them,” Audit Committee member Ed Kangas said during the group’s regular meeting, held at Town Hall.
“It’s almost incredible to me that we had all those problems. These were big deals. This town should not have had those problems. I am pleased they are resolved and we are off on the right foot going forward.”
The comments came on the first meeting of the committee since New Canaan hired a new interim CFO, whose predecessor retired amid lingering “material weaknesses” in town financial processes and controls that had been identified by auditors.
Tom Stadler, administrative officer in the office of the first selectman, said last week was busy at Town Hall with the former CFO’s “departure” and new interim hire Sandra Dennies’s start “and the walkthrough and changeover of the bank and investment accounts, and a number of other things,” adding that officials have put those matters “behind us now” to move on and “walk hand in hand.”
Referring to concerns that had been raised by the town treasurer, Audit Committee Chairman Bill Parrett said: “I understand there has been lots of activity in terms of giving the treasurer access to some of the accounts—maybe they were not the biggest or most important accounts—but they were accounts that he presumably should have been looking at, and that has been done.”
Dennies in brief remarks to the committee offered praise for her colleagues in Town Hall and in the finance department specifically.
“I do want to say that everybody I have met, especially in the finance department—I have my controller and senior accountant here today—has been exceptionally helpful in addressing the audit and addressing the issues that we discussed today,” she said. “I look forward to working with everyone for the next couple of months until they name a regular [CFO].”
Committee member John Lanaway asked for an update on the status of a search for a permanent finance director.
First Selectman Rob Mallozzi said a committee that includes himself, Parrett, Town Council Chairman Bill Walbert and Vice Chair Steve Karl, Board of Finance members Neil Budnick and Colleen Baldwin, Stadler and Dennies are putting together a document outlining the position’s requirements.
“We are working in unison so that we all get out of this person what we want out of this person,” Mallozzi said.
Meanwhile, last year’s audit has been completed and filed, according to Marcia Marien, a partner at accounting and consulting firm PKF O’Connor Davies who has overseen audits of the town. In addressing the committee, Marien noted that several findings in New Canaan’s financial policies and procedures had been addressed and resolved.
Marien raised no major red flags when asked for her preliminary thinking on the 2017 audit.
The meeting included extensive comments from Ted Doberstein, a CPA with Moorestown, N.J.-based Accume Partners, an advisory firm that has been studying the town’s and school district’s finances and processes as part of an internal audit.
Doberstein reviewed a number of items that his firm is addressing. For example, he said an issue was flagged regarding the New Canaan High School All Sports Booster Club, which had been using the athletic director as a point of contact.
Accume recommended “since the school district has little or no control over their activities that they remain autonomous from the school district and utilize their own address and have a contact that is not a member of the staff of the school district,” Doberstein said.
“The superintendent agreed. we have a remedy process and I think the timing of the remedy process was this June, so hopefully by this time the Booster Club would identify an appropriate address and individual that can be the point person for any inquiries or issues that might occur regarding the Booster Club.”
After the meeting, Mallozzi announced that the town has received a triple-A credit rating from Moody’s Investor Services, the agency’s highest.
Citing a “sizeable tax base with extremely high wealth and income levels, favorable location in Fairfield County, stable financial position with healthy reserves, modest long-term liabilities for pension and OPEB,” Moody’s assigned the AAA rating to New Canaan’s $9.3 million general obligation bond issuance.
“I want to thank my fellow colleagues on the Board of Finance for their guidance leading to this AAA reaffirmation and to the members of the Town Council for approving this bonding issue,” Mallozzi said in a press release.