Finance Committee hears audit, reconciliation and encumbrance updates; staff sets reconciliation target

Finance staff briefed the Finance Committee on the municipal audit timeline, reconciliations underway to clarify fund balances, and next steps for encumbrances and bonding.

Staff said the draft FY‑24 audit was expected by June 30 but had not been received at the time of the meeting; staff committed to press the auditors for delivery and to provide weekly follow‑up. Committee members described multiple factors that complicated the audit, including a mid‑year switch of accounting software and turnover in finance leadership, and staff said these changes increased the number of reconciliation items auditors requested.

To help close the fiscal year and support the audit, staff will email department heads to identify funds they wish to encumber and the general ledger lines and amounts that should carry into FY‑25. The committee set an internal reconciliation goal: staff aim to complete reconciliations by Aug. 20 and provide materials to human resources/audit liaisons so the external audit process can proceed.

During the discussion staff reported a cash balance of about $2.5 million at fiscal year end but cautioned that figure is not an entirely undesignated fund balance because outstanding encumbrances, late capital bills and timing differences can materially change available undesignated funds. Committee members identified a $1 million overrun on the Redbridge Road culvert replacement as an example of timing and encumbrance effects; staff also noted a roughly $900,000 reimbursement related to an earlier DOT/DEP project which positively affected the year’s revenues.

Staff said they will bring a recommendation and a public discussion on the municipal mill rate to the council in July to meet statutory processing timelines and to enable timely billing. The committee also discussed fall bond timing for road and equipment financing and said staff would present more detail on the municipal bond bank process and expected bond terms.

Staff announced several operational changes intended to improve finance operations: a consultant (named in the meeting as Sula Sarge from Bucksport) will do a deep dive on process improvements, the Union River Center of Innovation (also referred to as Erki in the meeting) will implement a coworking reservation platform called Co Works starting July 1, and the library will shift to a payment platform called Government Window to standardize transactions across departments.

No formal votes were taken on these administrative and audit matters; the committee asked staff to proceed with reconciliations, encumbrance requests and to continue weekly follow‑up with auditors.