As your Mayor, I encouraged training of the elected officials and department heads to help set them up for success. Community members with diverse backgrounds run with the hopes of governing our City. While they are tasked with navigating the complex challenges and crucial decisions that impact everyone’s lives, it is important to afford them training to improve capability, productivity and performance. As there can be steep learning curves caused by being unfamiliar with the territory of local government laws and many unknowns or actions required outside of a candidate’s campaign platform, I hope that this training process will continue. As a reminder, regardless of their election platform, they transition to the “owners” of the City’s platform, as they are now he authors and owners of the Charter and Statutes, regardless of when elected.
The City Audit
A “city audit” is an independent, objective examination of a city’s financial records, operations, and programs conducted by a designated auditor to assess whether funds are being used efficiently, effectively, and in compliance with laws and regulations, essentially providing an evaluation of the city’s financial health and management practices; this is usually done to ensure accountability to the public and identify areas for improvement.
The City’s audit period ending June 30, 2024 is July 1, 2023 through June 30, 2024 has been completed. I was elected in August 2023 at which time an Interim City Manager was in place from June 2023 through November 2023, paired with a Comptroller also in place. A short 90 days after, a replacement of the Interim City Manager by the Council with a City Manager through November 2024 took place. The audit and single audit had been ongoing for several months during the City Manager’s term. When the Council voted to end the City Manager’s contract, the Treasurer and I stepped in to find that many of the auditor’s requests to the City Manager over the months had not been addressed, and we worked diligently with the auditor’s to allow them to successfully complete the audit in the timeframe they had set. Working with the auditors on reviewing and making changes to the historical accounting and budgeting practices that were in place in previous years that affected this audited period, the Council was able to take steps to move the City forward with better accounting practices and policies.
It is important to understand the following key points about a city audit: The purpose is to verify the accuracy of financial statements, assess internal controls, check for compliance with laws and policies, and dental potential areas for cost
savings or operational improvements. The audit as conducted by the City’s designated auditor who is independent from the City’s departments and is an external accounting firm authorized to perform audits.
Financial records including revenues, expenditures, assets and liabilities were reviewed. Also reviewed were departmental operations and procedures, compliance with relevant laws and regulations and effectiveness of programs and services. The audit results were presented in a detailed report that outlines findings, recommendations for improvement and areas of concern.
The City Auditor independently assessed City funded programs, services and operations and evaluated the City’s compliance with local laws and regulations and the City’s Charter to determine whether objectives were achieved and whether services are provided efficiently, effectively and equitably.
It should be noted that citizens interfering with an audit refers to a situation where individuals not officially involved in the audit process actively try to disrupt or hinder the work of auditors by attempting to influence the audit finds, accessing sensitive information without authorization, or creating a hostile environment that prevents auditors from conducting their work effectively.
Citizens may try to influence an audit by contacting auditors directly, lobbying elected officials and internal personnel, or publicly criticizing the audit process to pressure the auditors to reach a specific outcome. Depending on the circumstances, actively interfering with an audit could lead to legal repercussions, including charges of obstruction of justice or harassment. Repeatedly contacting auditors with unfounded complaints or attempting to intimidate them during the audit process is harassment of auditors.
Our auditors informed one citizen to cease and desist contacting them and the details of those contacts were turned over to the appropriate regulating authority.
Concepts
Historical and current deficits (or surpluses), debt and interest are three central budget concepts. For any given year, the budget deficit is the amount of money the city spends minus the amount of revenue it takes in. The deficit drives the amount of money the city must borrow in any single year, while the debt is the cumulative amount of money the government has borrowed throughout it’s history. The interest paid on this debt is the cost of the City’s borrowing.
Excess of Expenditures Over Appropriations
The excess was caused by expenditures from budgeted capital expenditures that were previously committed or assigned for in previous periods. Additionally, a portion of this excess was covered by grants that were not previously budgeted for as they were not anticipated during previous budget periods.
Management discussed and made many journal entries to correct historical accounting recordings from patterns inherited on various charts of accounts and receivables and moved the Cty’s financials policies forward in accordance with accounting principles. Unrecorded receivables and other accounting areas that were not booked were captured and recorded. The footnotes to the financial statements, which were also part of the audit, are an important integral part of the audit.
I am pleased to report that the Auditor’s report states: “In our opinion, the financial statements referred to above present fairly, n all material respects, the respective financial position of the governmental activities, he business-type activities, each major fund, and the aggregate remaining fund information of the City of Newport, Vermont, as of June 30, 2024, and the respective changes n financial position, and, where applicable, cash flows thereof for the year then ended n accordance with accounting principles generally accepted in the United States of America.”
Your Council and Treasurer worked diligently over the past term to put in place excellent policies to advance our City and deter fraud, waste, and abuse. They made difficult choices on funding policies needed to cover cash flow issues that caught up with them from historical practices. A grant manager was put in place who has been diligently working and attending to the lack of attention that was thought to have been taken on grant management and has brought in grant funds. A new Council mix is in the making. Vote. Let’s not stop the good work. Keep moving our City forward.
Thank you to all who have stepped up to run. Thank you to all of the citizens of Newport for your interaction at my Mayor’s hours. You are much appreciated!
Your Mayor, Linda Joy Sullivan
