Editor, New Canaanite:
New Canaan voters have the opportunity to put an accomplished CPA in office as town treasurer this November.
Rob Fryer spent 34 years in the financial world as a partner at Deloitte.
Numbers are not partisan, and Rob knows numbers. He knows how to follow the money coming in and going out and he knows the proper processes for how transactions should happen.
With Rob Fryer as treasurer, material weaknesses would not have continued for years. Rob is retired and is committed to spending as much time in Town Hall during working hours as is needed.
New Canaanites who care about fiscal responsibility should vote for Rob Fryer on November 7.
Beth Jones
According to New Canaan’s external auditor, Marcia Marian of O’Connor Davies, there were 2 material weaknesses found during their audit of Fiscal Year 2016:
(1) the Tax Collection System
(2) the Finance Department, formerly led by Finance Director Dawn Norton.
“Coming off what independent auditor Marcia Marian called “a very bad year” for Town of New Canaan accounting in Fiscal 2015, Marian revealed to the Board of Finance on Jan. 10 that her firm’s audit of Fiscal Year 2016 shows the Town has two material weaknesses. One of the material weaknesses is for a fifth year in a row, and the other is for a fourth year in a row.
A material weakness is defined as “a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis,” according to O’Connor Davies, the external auditing firm at which Marian is a partner and which has been auditing New Canaan for a number of consecutive years. According to the Town’s Audit Committee a matter that is “material” is at least $5 million.
Marian told the Board of Finance that the first material weakness is the Town’s Tax Collection System. She said that “custody, record keeping and authorization” of money are all done by one person, the tax collector. Such a process lacks the segregation of duties that auditors find acceptable.
The second recurring material weakness is what Marian called “basic balancing” — closing books and records, balance sheets and accounts. The weakness is formally referred to as Timely and Accurate Financial Reporting.” (Direct quotes from Jan. 12, 2017 NC Advertiser)
Spot on Betty. More importantly this has nothing to do with the Treasurer function. More importantly there has never been a material weakness in the Treasurer function under Treasurer Brooks. Correcting these weaknesses was the responsibility of our Ecexutive branch and Finance Department which actually blocked efforts by our current Treasurer.
KINDLY NOTE: An update to the “material weaknesses” issues was addressed during last night’s Audit Committee meeting [October 17, 2017, Agenda Item 3(c) Management Letter – Any Material Weaknesses and Significant Deficiencies?].
According to discussion at the Audit Committee meeting there are no longer any material weaknesses in New Canaan’s financial records for fiscal year 2017. However, there are 2 Significant Deficiencies” as indicated below:
“The audit of the Town of New Canaan’s financial records for fiscal year 2017, which ended June 30, shows two Significant Deficiencies and no Material Weaknesses, which had plagued the Town for four out of the five prior years. The results were announced at the Audit Committee meeting on Oct. 17 by external auditor Marcia Marien of PKF O’Connor Davies.
A significant deficiency is, according to O’Connor Davies, ‘a deficiency, or combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.’
One of the Town’s two Significant Deficiencies relates to Timely and Accurate Financial Reporting. This had been a Material Weakness in the 2016 audit, so improvement was noted. However, ‘There needs to be a rougher review of year-end closings,’ Marien told the Audit Committee.”
“Month-end closings went well,” she said, which was an improvement over fiscal year 2016 when more frequent problems with the monthly closings led to the Material Weakness.
The other Significant Deficiency in the area of the Town’s financial systems related to control over passwords to software programs and access to the software by a so-called super-user. During the past year the “super-user” function of software administrator for the Finance Department was inside the Finance Department, and the administrator has the capability of changing things that were done by others.” (Direct quotes from NC Advertiser October 18, 2017)
A suggestion made by the Town’s internal auditor during the Audit Committee meeting is that the software administrator function be handled in the Information Technology Department instead.