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OPENPUBLICA · PUBLIC MEETING RECORD

Record of Proceedings

Audit Subcommittee Special Meeting on April 30, 2025

Common Council — Wednesday, April 30, 2025

BodyNew Britain, Connecticut

SessionCommon Council

DateWednesday, April 30, 2025

StatusFILED

Video Record

0:00 / 1:01:37

Transcript — VerbatimClick a timed line to jump · ⧉ to share it

1:31

Let's get this meeting rolling.

1:33

Good evening, everyone.

1:35

I call to order the April 30th, 2025 special meeting of the audit committee.

1:40

The time now is six oh one p.m.

1:43

Mr.

1:44

Clerk, will you Miss Clerk, will you please call the rule?

1:59

Alderwomen Barbosa.

2:01

Present.

2:01

Alderman Connors.

2:03

Present.

2:03

Alderman McNamara.

2:04

Here.

2:05

Alderman Smedley.

2:06

Alderwoman Savedra.

2:09

Um you have three presidents, you have a quorum.

2:11

Also seated is Alderwin Irish Sanchez.

2:15

Okay, public participation.

2:17

Are there any members of the public that wish to speak regarding the agenda items during public participation?

2:24

Any speakers once?

2:27

Any speakers twice?

2:29

Any speakers three times.

2:31

Anyone, no one under line?

2:33

Okay.

2:34

Seeing no speakers, we will move on to the special meeting.

2:38

The first item on the agenda is the discussion of the fiscal year twenty-four annual comprehension report, FY24 federal single audit report, and FY24 State Single Audit Report submitted by the Finance Department.

3:20

At this time, I would like to call up Jonathan Perugini and Leslie Zoll of Clifton Larson Allen to make presentation and to answer any questions.

4:26

Some required communication, and then some new um standards that will be applicable for fiscal year 25.

5:00

We also render an in relation to opinion on the schedule of expenditures of federal awards and state financial assistance in relation to the financial statements as a whole.

5:11

We also express an opinion on compliance with state and federal programs that we test throughout the audit.

5:20

I think it's important to note that we do not opine on internal controls.

5:25

However, we are responsible for letting you know if there's any material weaknesses or significant deficiencies that we find during the course of our audit.

5:35

And we will communicate those to you tonight.

5:40

And those findings are required to be communicated either on the financial statements as a whole or in relation to the federal and state single audit programs that we test.

6:00

So high level summary of our audit results.

6:03

The financial statements, the annual comprehensive financial report that you were given by Jonathan.

6:10

The opinion is an unmodified opinion.

6:12

That's what you would want to receive.

6:14

It means that the financial statements are materially stated in accordance with generally accepted accounting principles.

6:28

That we tested throughout the audit.

6:33

On the internal control side, like I said, we do not opine on internal control.

6:42

But we do we are required to communicate any issues that we found.

6:49

So with that, I want to just kind of backtrack to fiscal year 23 so you guys have some background as to how the city is now doing throughout the next fiscal year.

7:02

So if you recall last year, there was a material weakness on bank reconciliations that they were not done timely.

7:10

This has been resolved.

7:12

The finding has been removed.

7:14

The finance office and Danielle as the cash person in the finance office has implemented controls and has gotten the city back on track with timing of those bank recent.

7:27

The other finding that was removed from the audit report from fiscal year 23 is in regards to compliance over uniform guidance reporting requirements.

7:43

The federal audited federal single audit nine months after fiscal year end.

7:48

We were able to issue our audit report and submit the data collection form before that time frame.

7:54

So that finding has also been removed.

8:22

Audit adjustments that needed to be made, and they did.

8:26

We issued in June last year, it's now March.

8:44

As far as internal control issues on the federal awards or state financial assistance, we have no findings to report to you on those particular programs.

9:12

Right now, I just wanted to highlight a few things if you see on this chart.

9:31

And you'll see here that there was an increase in net position from last year in the governmental activities column of the financial statements, which includes all of the funds of the town on a full accrual basis of accounting.

9:48

Your net position is 4.5 million.

9:52

That's an increase of 12 million from the previous fiscal year.

9:56

The second column in 2024 is your business type activities, which is your water fund.

10:03

Net position in the water fund at 630 2024 was 54.9 million, and that's an increase of 842,000 from the previous fiscal year.

10:14

Total net position of the city is 59.4 million.

Discussion Breakdown — Share of Meeting

Fiscal Sustainability█████████████████████████████████████████████56%

Procurement Process████████████████████████30%

Budget Equity Analysis██████8%

Procedural███4%

Technology and Innovation██2%

Summary of Proceedings

Audit Subcommittee Special Meeting – April 30, 2025

The New Britain Common Council Audit Subcommittee held a special meeting on Wednesday, April 30, 2025, at 6:01 PM in Council Chambers, City Hall. The meeting addressed the Fiscal Year 2024 (FY24) Annual Comprehensive Financial Report (ACFR), the FY24 Federal and State Single Audit Reports, and the Request for Proposals (RFP) process for auditing services. The meeting adjourned at 7:00 PM.

Discussion of FY24 Financial and Audit Reports

Representatives from Clifton Larson Allen (CLA), Leslie Zoll and Jonathan Perugini, presented the audit results. The opinion on the financial statements was unmodified (clean). No material weaknesses were identified; however, a significant deficiency was reported related to construction-in-progress capital asset records.
The prior year’s material weakness on bank reconciliations has been fully resolved, and compliance findings from FY23 have been removed.
Key financial highlights: governmental activities net position increased by $12 million to $4.5 million; total fund balance increased by $9.8 million to $34.9 million (unassigned $25 million, assigned $9.9 million). Property tax collections remained strong at 96%, and expenditures were $9.3 million below budget.
Net pension liabilities decreased across all four plans; the FIRE plan is 68% funded, MERS 69% funded, and OPEB liability is 18.8% funded.
Management letter recommendations included improving grant accounting revenue recognition, performing monthly tax reconciliations, closing out old inactive grant funds, and reviewing the general liability reserve annually.
No findings were reported in the federal or state single audits. The city expended $169.1 million in state financial assistance; three state programs were tested with no issues.
Committee members praised the Finance Department for progress over the past three years, noting the audit timeline improved from more than a year to six months, and now to three months after year-end.
Finance Director Jonathan Perugini outlined steps to address the remaining significant deficiency, including cleaning up liability accounts and establishing a structured timeline with the auditors to deliver a clean trial balance earlier.

Discussion of RFP Process for Auditing Services

Jonathan Perugini reported that an RFP for auditing services was issued on April 7, 2025, with a due date of April 25, 2025. The RFP was sent to multiple municipal audit firms, but only CLA submitted a proposal due to staffing constraints at other firms.
The timeline requires the city to appoint auditors for FY25 by June 1, 2025, per state OPM requirements. The committee discussed the need to move quickly.
Perugini recommended a two-year contract with three optional one-year renewals. The proposed cost was approximately $137,000–$139,000, in line with the budgeted amount.
Committee members expressed satisfaction with CLA’s work and the improvement in audit timelines. Some procedural discussion occurred regarding whether the recommendation must go through the AFL committee or directly to the full council; ultimately the committee proceeded to a vote.

Key Outcomes

The committee unanimously approved a motion to accept the FY24 ACFR and Single Audit Reports and refer them with a neutral recommendation to the full Common Council.
The committee unanimously approved a motion to recommend CLA as the independent auditor for the next two fiscal years (FY25 and FY26), with three optional one-year renewals, subject to council approval.
Meeting adjourned at 7:00 PM.

Meeting Transcript

Let's get this meeting rolling. Good evening, everyone. I call to order the April 30th, 2025 special meeting of the audit committee. The time now is six oh one p.m. Mr. Clerk, will you Miss Clerk, will you please call the rule? Alderwomen Barbosa. Present. Alderman Connors. Present. Alderman McNamara. Here. Alderman Smedley. Alderwoman Savedra. Um you have three presidents, you have a quorum. Also seated is Alderwin Irish Sanchez. Okay, public participation. Are there any members of the public that wish to speak regarding the agenda items during public participation? Any speakers once? Any speakers twice? Any speakers three times. Anyone, no one under line? Okay. Seeing no speakers, we will move on to the special meeting. The first item on the agenda is the discussion of the fiscal year twenty-four annual comprehension report, FY24 federal single audit report, and FY24 State Single Audit Report submitted by the Finance Department. At this time, I would like to call up Jonathan Perugini and Leslie Zoll of Clifton Larson Allen to make presentation and to answer any questions. Some required communication, and then some new um standards that will be applicable for fiscal year 25. We also render an in relation to opinion on the schedule of expenditures of federal awards and state financial assistance in relation to the financial statements as a whole. We also express an opinion on compliance with state and federal programs that we test throughout the audit. I think it's important to note that we do not opine on internal controls. However, we are responsible for letting you know if there's any material weaknesses or significant deficiencies that we find during the course of our audit. And we will communicate those to you tonight. And those findings are required to be communicated either on the financial statements as a whole or in relation to the federal and state single audit programs that we test. So high level summary of our audit results. The financial statements, the annual comprehensive financial report that you were given by Jonathan. The opinion is an unmodified opinion. That's what you would want to receive. It means that the financial statements are materially stated in accordance with generally accepted accounting principles. That we tested throughout the audit. On the internal control side, like I said, we do not opine on internal control. But we do we are required to communicate any issues that we found. So with that, I want to just kind of backtrack to fiscal year 23 so you guys have some background as to how the city is now doing throughout the next fiscal year. So if you recall last year, there was a material weakness on bank reconciliations that they were not done timely. This has been resolved. The finding has been removed. The finance office and Danielle as the cash person in the finance office has implemented controls and has gotten the city back on track with timing of those bank recent. The other finding that was removed from the audit report from fiscal year 23 is in regards to compliance over uniform guidance reporting requirements. The federal audited federal single audit nine months after fiscal year end. We were able to issue our audit report and submit the data collection form before that time frame. So that finding has also been removed.

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