Trending
An auditing firm issued a "disclaimer of opinion" in the Fiscal Year 2020 audit reports for the City of Williamsport.
"We did audit what we could, however, there we are still issuing a disclaimer of opinion to get to that clean opinion," said Kim Stank, an auditor with Zelenkofske Axelrod.
"There is going to be quite a bit of work to do," she said. "We will have to talk about how we get over that hurdle."
Councilwoman Liz Miele, chair of the finance committee, noted the audit reports are "perfunctory for the most part."
They reveal the assets, capital assets and liabilities, Stank noted.
"You start the year with a negative net position of $130 million," Stank said.
She added that $159 million is an unrestricted deficit. The (pensions) were $142 million, which is one of the driving factors that caused the city to be in that low of a position.
"Those figures are the end of Dec. 31, 2020, and where Williamsport stood financially as a city," she said.
For the year end, including scoping out RVT, there is a change in the position with a negative $8 million, the reports showed. "The driving factor was the assumption of debt from RVT, which was $10 million," Stank said. "We took over that debt and it just drove that net position a little more negative."
Miele observed how it appeared as though the city was somewhat to the positive in terms of the city budget versus the city's actual outlay.
At the fund level, the report had a balance sheet broken into governmental funds. These were major funds and non-major funds, general, HOME, capital projects, non-revenue escrow and non-major.
When a city looks at its statement of revenue, expenditures and changes – usually council is always concerned about the general fund, Stank noted.
"You can see your net change was positive -- $374,000," she said. "You had a positive change in fund balance."
More municipalities have a liability on employment benefits than not. More than half don't fund it, said Justin Bell, of the auditing firm
It is because a lot of them don't have millions of dollars to put into a trust, Bell said.
"Most are pay-as-you-go," Stank said.
Miele took notice of the debt related to RVT, which is now a separate authority (RVTA).
"It is an unfortunate element of 2020 that we are aware of," she said.
RVTA is undergoing a separate audit by another firm.
For the past administration and because of the financial position it put this administration under, the council has budgeted without its members really knowing what the year-end balance was from the prior year, according to Miele.
She noted the council believes it is important to have those numbers to track whether the city is deficit-spending or not over the last four years. It is considered to be a key to helping the city to get a better picture of its finances moving forward.
The audit reports indicated there was a negative balance in the capital projects fund, due to capital projects the city has been working on.
The city began using the American Rescue Plan funding in 2021.
The federal funds used during that period included $25,000 of coronavirus relief funds for personal protective equipment for the fire department.
The work by the auditing firm included a single audit report. As for the outlook on the two remaining audits, for Fiscal Year 2021, the firm has started to get the information uploaded from the city finance team.
"There will be changes on that and the 2022 audit will have to wait for late fall to get done," Stank said.
"If we want to try to get the 2023 audit cleaned up, there are needs such as capital assets."
"We will have to test the capital asset listing to make sure the assets are the city's, including any leases, and subscription-based IT."