City gets another clean audit
By Gordon Dritschilo
Staff Writer | April 03,2013
Rutland is in good financial shape, according to City Treasurer Wendy Wilton.
Wilton reported to the board Monday night that not only had the city received an unqualified opinion for the second year in a row in the 2012 audit, but that a separate audit of federally funded programs also drew an unqualified opinion for the first time.
Audit opinions come in four varieties. “No opinion” is just what it sounds like — the auditor offers no opinion on the accuracy of the financial statements under review. An adverse opinion means the auditor does not trust the statements to be accurate. A qualified opinion means the statements are fair but have certain issues, and an unqualified opinion means the auditor can find no significant reason not to trust the city’s books.
Last year was the first unqualified opinion in 32 years.
Wilton pointed to several highlights, starting with the city’s assets exceeding its liabilities by a total of more than $34 million. She said the gap has widened due to a decrease in long-term debt, particularly in money owed to the pension fund.
The year-end balance in the general fund was $4.1 million — roughly 23 percent of revenue — with an unassigned fund balance (the city’s cash on hand) of $2.9 million, about 16 percent of revenue.
Wilton noted that the fund balance increased by $270,542 despite a budgeted decrease of about $500,000.
“We outperformed the budget significantly,” she said.
The audit did note areas where the city could strengthen its internal controls, and Wilton said a number of those changes, such as policies dealing with inventories and tracking of pass-through grants, were already under way.
Wilton said that cash-flow issues in the sewer fund, which finished the fiscal year with no cash on hand, would hopefully be resolved by recent changes to the sewer rates.
Finally, Wilton said that while unfunded liability in the city pension had come down thanks to changes in the pension plan, there was still a gap there of $23,133,299
“My caution out there is a pension liability of $23 million is serious and must be dealt with,” she said.
Finally, Wilton said she was worried about the effect the region’s economic health was having on the city’s financial health, noting that a decline in tax revenue will make it hard to maintain local infrastructure.
“It’s nothing I can control, but policymakers on the state and local level need to be focused on that,” she said.
The audit was referred to the Finance Committee for further discussion.