Auditor: Concord’s reserves, AAA rating strong despite control weaknesses; $400,000 water adjustment cited

Tony Roselli, the engagement partner for the town’s FY25 audit, told the Concord Financial Audit Advisory Committee on June 17 that the town’s overall fiscal position remains strong but that several internal-control and reporting issues require remediation.

Roselli said the town’s general fund balance has increased over the past decade and that Concord retains a triple‑A bond rating. "You've gone up a little bit. I went back 10 years. So you had about $35,000,000 in the general fund. Back in 2016, you got about $41,000,000," he said, and praised conservative budgeting and reserve use as reasons for the strong rating.

At the same time, Roselli identified discrete problems the audit team flagged. The audit found water and sewer receivables had not been reconciled through year‑end 06/30/25, requiring "we had to make a $400,000 adjustment," Roselli said. Staff reported they have identified the underlying cause, will make reversing journal entries to correct the ledger and have instituted an official commitment process to prevent recurrence.

Roselli also reported roughly $400,000 in stale or uncashed checks across about 300 items, some more than a year old. He urged the town to advertise unclaimed payments and either void and reissue or close out stale items per the town’s procedures and Chapter 200A guidance. "If people don't claim this, this is yours," Roselli said, urging efforts to return funds where possible.

Other housekeeping issues included trust funds maintained offline in spreadsheets that should be brought into the chart of accounts, quarterly payroll reports that were harder to locate after the ADP-to‑Munis conversion (Roselli said the filings exist), and several low‑activity special‑revenue or gift balances (about $500,000 total) that staff plan to reconcile with departments.

Roselli reported favorable longer‑term funding measures: Concord’s OPEB liability was about 74.9% funded and pension funding was about 91.2% as of the 12/31/2025 valuation, and he encouraged a cautious asset‑allocation approach as funding improves. He also noted the town may need to provide substitute disclosure materials if audited financial statements are late and that rating agencies increasingly request governance documentation in addition to financials.

Jennifer Barrett, the town CFO, described near‑term fixes already underway: reconciling the ambulance receivable method following a change to paramedic service delivery, moving trust funds into the ledger as part of a chart‑of‑accounts cleanup, and closing or repurposing old capital project balances. Barrett said the single audit team was awaiting last federal backups and that staff expected the single‑audit filing to be completed soon.

The audit committee asked staff to add timelines to the management response and asked the chair to draft a short cover memorandum to the Select Board highlighting both the town’s strong fiscal picture and the process improvements underway. The committee will revisit remediation progress at future meetings.

Next steps: staff will finalize the single‑audit backup and file the single audit, complete the trust‑fund and special‑revenue reconciliation, address the receivable adjustments, and provide a management‑response timeline to the committee and Select Board.