City receives clean financial audit for fiscal year 2022-23

LACONIA — City councilors heard their financial audit was clean Monday evening at their regular meeting.

“The audit is the meat of the annual comprehensive report,” City Finance Director Glenn Smith said. 

“The audit involves performing procedures to obtain audit evidence regarding the amounts and disclosures in the city financial statements,” Scott McIntire of Marcum Accountants and Advisors said. “Audit involves performing procedures to obtain audit evidence regarding the amounts and disclosures in the city financial statements.”

Auditors found no disagreements with city management and no material or corrected misstatements.

McIntire and Smith noted there is a major shortage of accountants working in the field and the situation is exacerbated by low numbers of college-aged students training in the field. The shortage has caused regional delays in auditing, including in the city's 2022-23 audit.

“Our standards require that we report if we had any disagreements with management over the application of generally-accepted accounting principles,” McIntire said. “We detected no material corrective misstatements. That’s a very positive attribute right there to the audit process, it’s essentially saying that we did not have to make any material corrections to your financial statements.”

McIntire said the city’s financial statements were prepared correctly and do not present cause for concern. 

“An audit is considered an attest function in accordance with our professional standards,” McIntire said. “We are attesting to your financial statements being prepared and being in conformity with generally-accepted accounting principles.”

McIntire said he came to two recommendations for the city to implement over the course of performing the audit. 

“We have two recommendations,” McIntire said. “One is to improve the timeliness of some cash reconciliations. And go maybe one step beyond that in creating a city-wide reconciliation. The city does a very good job with most of their bank accounts, but there are a couple that just need to be brought into the fold. The school district has its own bank accounts, the airport has some of its own bank accounts and of course the city has many bank accounts.”

He said implementing the recommendations would help streamline the financial operations of the city.

“One city-wide reconciliation that would really benefit Laconia greatly, is essentially, on one piece of paper, on one spreadsheet,” McIntire said. “Centralizing this into one comprehensive city-wide reconciliation would really benefit the city being able to see how it all works.”

Making sure balance sheets match between the city’s records and ambulance operations is also important, he said.

“Also we’re improving timeliness of your ambulance reconciliations,” he said.

McIntire reported the unassigned fund balance, part of the city’s general fund, had $3.68 million on June 30, 2023, up from $3.2 million the year before.

“Your unassigned balance on June 30 of 2023, was just under $3.7 million. A year ago, June 2022, it was just over $3.2 million, so a $480,000 increase,” McIntire said. “What drives change to your unassigned fund balance are positive budgetary results.”

City Manager Kirk Beattie said the city is already working to implement the audit recommendations.

“I want to just make a quick mention to Glenn and the finance department for their work going into this. It’s weeks of work, working with them and they did a great job,” Beattie said. “Prior to a couple of the two recommendations, we have been demoing a software system, not knowing that these were going to be the recommendations that actually would address both of these reconciliation issues, and our intention is to as part of our future purchase.”

Smith said the audit process is time-consuming but valuable. 

“We have a better financial system because there’s somebody looking over our shoulders telling us what we need to do to make it better, and when you hire folks like that and they give you suggestions, they give you recommendations, it pays to listen to them and we’ve already started working on those recommendations they had this year to bring them into fruition,” Smith said.

Smith also noted, while discussing the audit results, that total city bonded debt is at about $37 million or about $2,000 per capita. That works out to about 19% of the 3% limit of assessed value.

In other business, city council:

• Accepted a $25,000 donation from the Jensen Benevolent Fund to support the founding and construction of a firearms training range for the Laconia Police Department

• Heard from Conservation Commission Chair Dean Ansen that a parcel on Lafayette Street may contain a vernal pool. The conservation commission would like the parcel to be rezoned as conservation land. The council tabled the request

• Heard from Mayor Andrew Hosmer that the city considers the senior center to be very important and that recent allegations of neglect by the city are untrue. Hosmer expressed agreement with the notion that the Meals on Wheels program should have a commercial kitchen located in Laconia to avoid transporting meals from Concord each day. The city is in the early stages of organizing a capital campaign to fund a commercial kitchen in the city

• Approve a request by organizers of the farmer’s market in the Weirs to waive certain fees associated with hosting the events. Organizers requested a waiver of a $300 licensing fee and a $200 special event fee and the council settled on waiving half of the expense and applying a $250 licensing fee only

• Approved the release of an easement requested by the Laconia Airport Authority

• Approved the lease agreement between the Laconia Airport Authority and Dave Emerson of Emerson Aviation. Emerson intends to build new airplane hangers there

• Scheduled a public hearing regarding a zoning amendment pertaining to unsafe structures for April 22

• Approved an amendment to the zoning map