SPENCER — The College of Aldermen of Spencer has extended its audit contract for a second time at the request of the audit firm that carried out the service for the previous financial year.
The board approved an extension in January at the request of HR Accounting Services due to a delay caused by COVID-19.
On Tuesday, HR audit manager Nick Wicker said early in the report’s final review procedures there were issues with carrying forward fund balances and grouping the issues into three statements.
Wicker said the company was unable to obtain an electronic version of a final trial balance that matched the city’s audited financial statements for 2020, so he had to manually work line by line and group accounts from government level to individual fund level.
This is an “initial audit”, which means that RH has never performed audit services for the city before.
City manager Peter Franzese said that if the city were a larger organization, it would prepare its own financial statements, but it must hire an accountant to prepare the statements and perform the audit. For this document, something was lost in translation when the city changed auditors.
“It’s something related to the previous listener,” Franzese said. “The way they did it was on paper.”
Franzese said that at this point the city no longer had to provide the company with any documents and was waiting for the audit to be completed.
The city chose RH after issuing a request for service proposals last year.
Wicker said the firm is now close to completing the audit and expects a draft to be presented to city budget officer John Sofley “within the next week”. The due date for the initial report was October 31.
Alderman Pat Sledge asked if the company had lost any employees due to COVID-19. Wicker said the company has experienced COVID-19-related turnover and non-pandemic turnover as well.
Wicker said the company did not note any material weakness in the city’s finances, but there was a lack of segregation of duties due to the limited number of city employees. Wicker said this is typical of towns the size of Spencer and the Local Government Commission will not penalize towns for this issue.
“It’s very common for organizations of this size to have segregation of duties limitations just because of staff,” Wicker said.