New London to use audits to keep better track of money

New London - The City Council will spend $31,500 for operational audits for 10 departments, with the hope the auditors can help the city find better ways to manage its finances.

J.H. Cohn of New London, the accounting firm that does the city's annual end of the year audit, will look into two years worth of numbers in the police, fire, public works, finance, personnel and recreation departments, as well as the mayor's office, the city manager's office, the Office of Development and Planning and the Water & Water Pollution Control Authority.

In the fiscal year ending June 30, 2011, the city ran a $1.3 million deficit. In the year ending June 30, 2012, the city was $1.7 million over budget.

Councilors have been struggling with how much money was overspent and why. They hope the audit will begin to explain the deficits.

The council voted 5-0 Monday night to approve the money for the budget. Councilors Wade Hyslop and Donald Macrino did not attend the meeting.

"I love the idea, but not because I think anything is untoward,'' Finance Director Jeffrey Smith said last week after the council's finance committee recommended going forward with the audits. "I like a management audit. It's a way to look at how we are doing things. They can tell us how we can do better."

He added that an outside opinion can help a municipality become more efficient and effective. The accountants also will design and implement a monthly financial disclosure process, and will recommend improvements and modifications to the way financial reports are compiled.

Mayor Daryl Justin Finizio did not attend the meeting but sent word to the council that he too wanted an outside look at the books.

"The mayor is welcoming of the operational audit and he looks forward to the results,'' Zak Leavy, the mayor's executive assistant, told the council.

The money to pay for the audit will come from the Veolia Water Fund. In 2010 when the city extended Veolia's contract to operate the municipal water and sewer systems, the company made an upfront payment of $2 million to the city. Half was put into the water and sewer fund for infrastructure improvements, and the other half went into a fund for the city use as needed.

Councilor Adam Sprecace said Monday that he believes the account contains about $700,000.

k.edgecomb@theday.com