City auditor: FY25 books closed; free-cash submission nearly complete after large August claims reduced health trust balance

John Richard, Gardner City auditor, told the Gardner City Council subcommittee on Oct. 1 that the city closed its FY25 books in July and is finishing the paperwork to seek a free-cash certification from the state.

"I'm probably about 95% complete right now. My goal is to submit for free cash, hopefully by Friday or early next week," Richard said. He said the Department of Revenue often returns questions after the initial submission; he expects to answer those and move quickly toward certification.

Richard said the city's health-trust balance stood at about $1.8 million as of Aug. 31 but declined to about $1.3 million by Sept. 30 following an atypical month of claims. "The big jump was basically we had $450,000 in claims in August that were above our monthly level deposit," he said.

Richard also noted an administrative change affecting flexible spending accounts: a vendor that previously did not charge the city for FSA administration has begun charging "close to, like, between 800 and a thousand dollars a month." He said the account is not yet in deficit but could become strained and that he and the mayor are discussing options.

On audit work, Richard said CBIZ (formerly part of Melanson & Heath) conducted a preliminary audit visit in mid-July and will return Oct. 20for the main FY25 audit. He said he submitted actuarial data to Stone Consulting for the city's GASB report and has sent workers'-compensation materials to DL Associates for that audit.

Richard summarized operational processing from the start of FY26: he signed 35 new-hire forms and 35 rate-change forms, processed 57 reclassifications of expenditures and posted 36 beginning-year journal entries. He said month-end cash and receivable reconciliations are current through August.

The subcommittee asked follow-up questions about the FSA vendor and claim reimbursements; Richard said the stop-loss report shows roughly $150,000 in reimbursements pending and that further reimbursements could arrive soon.

Councilors agreed to keep the item on future agendas for updates.

Ending: The auditor's updates and the health-trust balance will return to a future subcommittee agenda for any additional follow-up as reimbursements and audit work continue.