standing Westerly Town Hall

WESTERLY — The town and school department ended fiscal 2018-19 in the black, according to an independent audit reviewed with the Town Council this week.

The town ended with a modest operating surplus of $116,058, bringing its reserve to $9.4 million as of June 30, 2019, according to the report by Providence-based Marcum Accountants.

Town expenditures came in $909,432 over budget due to one-time items and changes in operating plans such as how police detail assignments are budgeted for and legal expenses, including "big claims" that were paid out by the town, according to Erica Olobri, a director with Marcum Accountants. Legal expenses were about $250,000 over budget.

The overage was counterbalanced by revenues that were $1.35 million over budget due in part to strong tax-collection efforts.

"I think the important thing to note here is there were no structural deficiencies in the budget process. Those variances were explainable and certainly not anticipated six months prior to the fiscal year beginning," said James Wilkinson, a partner in Marcum Accountants.

The overall unassigned fund balance, or surplus, of $9.42 million, which includes the school department's $3.3 million surplus, represents more than 10% of the operating budget but is "on the lower end of the recommended healthy target of 8-16% of budgeted expenditures, according to the report.

The school department ended the fiscal year with a $389,859 operating surplus that resulted from lower than anticipated salary and benefits expenditures Olobri told the Town Council on Monday.

The accounting firm found no structural deficiencies in the town or school department's budgeting process or weaknesses in budgetary controls.

The municipal water, sewer and transfer station operations generated positive cash flow from operations for the year and each ended the year with positive net assets and positive change in net position for the year, according to the report.

Olobri said the police pension for retired officers was in "good position" and was 73.7% funded as of July 1.

Overall, Olobri said, "We just want to point out that this year there has been a dramatic change in the town and school team. They've made so many significant changes internally for the better, so that made it a little bit smoother doing the audit process."

Finding pointed out in the previous year were all addressed, Olobri said leading to a much smoother and streamlined audit process.

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