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Auditors who completed a 2019 audit for the City of Williamsport gave a disclaimer of an opinion with so many incomplete figures.
Tracey Rash, manager of Government Finance Solutions, said she is trying to correct inaccurate accounting and get to the bottom of issues caused by a prior city administration.
Her figures were provided to the auditing firm of Zelenkofske Axelrod, Harrisburg.
The 2019 audit does not include audits underway for River Valley Transit, now an authority, or Williamsport Parking Authority, according to discussion with the city finance committee.
As for the audit report, it is the perception of the committee that none of the audits outstanding -- for 2020, 2021 and 2022 will be "clean."
"We can hope to have a reasonably clean opinion in 2023," Councilwoman Liz Miele said.
"That is our goal," Kim Stank, with Zelenkofske Axelrod, said.
The city can be fairly certain that 2020, 2021 and 2022 audits will have the same disclaimer of an opinion as 2019. Efforts are being made to have a better opinion in 2023.
Rash said that assumption depends on the outstanding issues and potential for loss as well as capital assets.
"It would take a huge effort to provide accurate audit figures for the start of 2022," Rash said.
Instead, Rash and others are focused on getting accurate figures for the ending of 2022 and focused on the correct start to 2023 to show a more accurate and a better beginning balance sheet.
She remarked on how it would require "deep digging" for better numbers on 2021 and 2022 audit years.
A list of the special revenue funds is in the audit. It has funds for Community Development Block Grants, non-reserved escrow, liquid fuels, home rehab, redevelopment authority, natural gas impact fees and pool repair were in the 2019 audit document.
Debt service funds are not considered special revenue, Stank said. The audit has major funds and non-major funds in it.
It was noted, upon a question by Councilwoman Liz Miele, committee chair, that the city's debt limit is $62 million and that the city currently carries about $20 million to $23 million in debt.
"What is the recommended debt for a city our size?" Miele asked.
Rash answered by saying that it should be determined based on the Governmental Accounting Standards Board. For a city this size, the board recommends 3 to 6 months of expenditures, so for Williamsport, it would be $8 million to $12 million.
The board also recommends the city has a policy on how to replenish so the fund balance reserve does not fall below certain parameters, Rash said.
"What does that policy look like for other municipalities?" Miele asked.
If it falls below 50% of the next year's expenditures the city would need to adopt a budget that repays the reserves or about one-sixth for the next six years to get the reserve back up to what it ideally should be, Rash said.
"The presumption is there is a means to do that in our budget," Miele said.
As for the debt discussion, "I'm going to assume nobody wants to max out their debt," Miele said. She added that in her own personal and political life she has always been fairly debt averse.
"I'm not sure there is a recommended debt load that allows a municipality to not be devoting a massive chunk of its budget to debt service while being able to cover larger expenditures," Miele said.
Rash said she believed that was why the state Department of Community and Economic Development does the calculation and provides it to municipalities. She noted the scenario similar to what one undergoes when buying a house and the Realtor gives the maximum amount the purchaser of the house can afford.
Rash also pointed the committee toward the Local Government Debt Act, which defines the calculation for the city. It provides municipalities with a guideline on its borrowing limit.
The audit is on the council agenda for a vote.
The results of the 2019 audit are expected to assist the council in next month's proposed budget talks.