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Auditors working on the city of Williamsport's 2019 audit released a "disclaimer of opinion" Tuesday.
The firm's representative appeared before the City Council's Finance Committee saying they continue to get financial records that are as accurate as possible from the administration of Mayor Derek Slaughter.
"We are issuing a disclaimer of opinion," said Kim Stank of Zelenkofske Axelrod of Harrisburg.
These were financials and documents managed under former Mayor Gabriel J. Campana and former Finance Director and River Valley Transit General Manager William E. Nichols Jr.
Nichols was fired by Slaughter in early January, 2020.
District Attorney Ryan Gardner received information from the mayor and it was turned over to former state Attorney General Josh Shapiro for an investigation, which has continued with Attorney General Michelle Henry. Auditors have indicated comingling of funds and misappropriation of grant money. The results of these investigations, which included interviews with subjects before a statewide grand jury, are pending.
Additionally, the Federal Transit Administration and state Department of Transportation, have remained in touch with the current administration.
Stank offered the opinion and released a draft of the city financials and the single 2019 audit report to the committee.
In the single audit report, the auditors came up with a finding, which was under the cause section, Stank said.
For 2019's audit, the former River Valley Transit and Williamsport Parking Authority financial records have not been available, she said.
A separate auditing firm is working with River Valley Transit Authority (RVT was not an authority under the prior administration) and the Williamsport Parking Authority, Stank said.
Councilwoman Liz Miele, committee chair, said she understood and expected the opinion rendered by the auditors.
She asked where auditors see it going next.
"Where we see it going is that Tracey Rash has cleaned up a lot in 2023 and that the next couple of years will be a disclaimer of opinion," Stank said.
Stank said the auditors found an error, for example, amounting to $500,000 in the Community Development department.
She noted with current efforts the auditors could see "light at the end of the tunnel."
That is because of what Rash has accomplished as manager of Government Finance Services, she said, which is under contract with the city.
Depending on the pending state and federal investigations, the city will have a better idea and opinion from the auditors on its financial status in future years, according to the auditor.
Moreover, the city administration recently hired a new director of finance Heather Jacoby, who is working with Rash to learn the city finances and bring her years of experience to bear. Additionally, the city is getting software to provide accurate and real time accounting available for the public to see.
Nevertheless, Miele and others expressed concerns about what the auditors found and what impact it would have on the city moving ahead with so many questions about financial records in the years before Slaughter took office.
"The city is in need of audits to be compliant with a variety of federal and state regulations in terms of monies received," Miele said.
Miele asked if the draft 2019 audit qualified for what the city would need.
She wondered whether the three audits for years 2020, 2021 and 2022 will meet the regulatory requirements for the city to be able to submit requests to its federal and state partners.
"It is what we have," Rash said, to the question of whether this will satisfy the federal and state partners.
What is occurring is the city is moving forward to get through the audits.
Councilman Randy Allison expressed concern and asked if the 2019 audit finding precludes the city from borrowing large amounts of money, especially when it needs millions of dollars to reinhabit City Hall.
The 2019 audit report and discussion on whether the city officials will vote to reject or accept the high bid on the sale of City Hall will be among the discussions taking place on Thursday at the city council meeting.