An important message from your Mayor | Linda Joy Sullivan

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This letter was submitted by Linda Joy Sullivan, Mayor of Newport City

Oftentimes at City Council meetings during the public comment period that is afforded to allow members of the public to have an opportunity to hopefully speak on issues pertinent to City Council business, statements may be made that are for the sole purpose of supporting someone’s personal platform or because findings do not support someone’s personal agenda. These statements are often made at the expense of qualified expertise. Regardless of the purpose of the comment, these statements may be heard by other residents or read if published, and can, like the renowned childhood game of telephone, turn into misguided and unqualified statements that could inappropriately be relied upon.

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As your Mayor, and also a licensed certified public accountant who is an auditor, I believe it is of utmost importance to qualify the need, purpose and explanation of what an independent audit is and what it is not. What it is not: it is not just a third-party vendor report. Such flippant remarks and mischaracterizations are not only dangerous to rely upon as they clearly appear to be self-serving and contrary to the entire definition and responsibility and accountability upon the purpose and ethics of independent professional auditors, but clearly identify the lack of understanding of what independence and an audit actually is. Independent Auditors are held to a high fiduciary standard and are accountable to the public. They undergo extensive peer reviews and must abide by regulatory auditing standards and professionalism. Auditors, unlike the legal profession, are not self-regulating. Instead, they must answer to strict oversight regulatory authorities, and must remain independent. This is a far cry from just paying a third-party vendor to write something at someone’s directive. That would be a total impairment of independence and the high regard and need for independent external audits.

It is for this purpose of clarification to the residents of Newport that I believe it is responsible to clear up any misguidance.

An audit is an official inspection of an organization’s financial accounts by an independent body.

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Government agencies at all levels require the use of audits and auditors in order help maintain public trust. One of the key requirements to being able to audit successfully is independence. Audits performed by auditors from an outside entity are known as external audits. Because they are not part of the municipality, they maintain a high level of independence, which is mandatory for conducting external audits. Again, contrary to the comment referenced at the beginning that the auditors are merely a third-party vendor, the City of Newport has retained the independent Certified Public Accounting firm of Kittell Branagan & Sargent (“KBS”) to perform the City of Newport’s annual audit. The auditing procedure mandates the issuance of an Independent Auditor’s Report. For more than 30 years KBS has provided auditing services, of which municipalities are included.

The auditing firm of KBS performed their audit in accordance with generally accepted auditing standards. They exercised professional judgment and maintained professional skepticism throughout the audit. They identified and assessed the risks of material misstatement of the financial statements, whether due to fraud or error, and designed and performed auditing procedures responsive to those risks.

The independent auditing firm evaluated the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluated the overall presentation of the financial statements. The independent auditing firm performed their audit on financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Newport as of and for the year ended June 30, 2023, and the related notes to the financial statements which collectively comprise City of Newport’s basic financial statements.

Auditors are important because they are able to provide assurance of an organization’s financial statements from an objective and independent opinion. It benefits the public and the municipality in several ways, such as maintaining consistency, finding errors in their processing, or possibly detecting fraud. One of the fundamental roles auditors play in society is providing trust. Auditors play an important role as an objective third party that allows you to trust either a statement or assertion that somebody has made.

Society has for decades put a high regard on the independent auditors, their honesty, integrity and ability to abide by their regulatory oversight authorities. Again, I write this so that Newport City residents are not misguided by thinking that the Independent Auditor’s Report issued by the independent auditors KBS is anywhere comparable to a third-party vendor statement. Society has long held auditors to a higher fiduciary responsibility than most.

You are in good hands Newport City. Please come to my Mayor’s hours on Monday and Wednesday mornings, resuming in January from 9:00-11:00 AM, at the City Council Room at the Municipal Building. These meetings are for you. I’m listening.

Have a happy and healthy New Year as we enter 2024 together. Your Mayor, Linda Joy Sullivan

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