Update on Status of FY21/22 Audit
Today, on my first day in office, I met with representatives from the state Office of Policy and Management regarding the status of the town's overdue financial audit for Fiscal Year 2021-2022. I was joined by our finance director, our auditors, and our former CFO who is currently assisting with the audit process for FY21-22.
At this meeting, I learned that we can expect to receive a draft of the FY21/22 audit next week with final submission to the state to take place prior to December 31st.
It is good news that this audit is nearly complete, but it is important to understand that the town remains in a challenging position related to its audit submissions. In fact, OPM representatives referred to the situation as both "serious" and potentially severe given the timeline.
The audit for FY22/23 is due December 31st. Given that FY21/22 is not yet complete, it is clear that town will require an extension to complete and submit FY22/23. OPM understands that the town will request an extension of this date. Extensions are not necessarily unusual, but these extensions are not indefinite. This year, the town went well beyond its approved extension for FY21/22.
OPM representatives were clear that Colchester cannot take another year to submit the FY22/23 audit. Failure to produce a timely submission for another year would constitute a "second trigger" that could put Colchester on a path toward state oversight. Today's meeting should be treated as "red flag" for our town according to OPM.
As it stands, Colchester is set to be working on three years worth of audits over the next twelve months.
FY21/22 is currently being wrapped up and submission is expected by December 31, 2023.
FY22/23 is due December 31, 2023. The Town will require an extension which will take the work for this audit into 2024.
FY 23/24 will be due December 31, 2024.
It is critical that we get past this backlog so we do not remain trapped in a permanent cycle of delays that will put us out of compliance with state law. OPM strongly recommends that the town make available whatever resources the finance department requires to ensure that the issues that led to the delays with FY21/22 do not recur.
Following the submission of the FY21/22 audit, I will meet with the finance director and the former CFO again to develop a strategy to ensure that we are able to return to compliance. I am grateful to both of them for their efforts to move through this heavy backlog of work.
If there is a need for additional resources, I will request that the Board of Selectmen and Board of Finance support this important effort. It is important to begin addressing this now as a team. Resolving this situation does not end with the submission of the FY21/22 audit. Returning to compliance and ensuring financial stability is my top priority and responsibility.
Sincerely,
Bernie Dennler
First Selectman