Auditors: WPCA Accounting Has 'Significant Deficiency'

Auditors hired by the town reported they found a “significant deficiency” in the accounting method of the Water Pollution Control Authority.

But finance director Terry Hart said an auditor within the firm Grant Thornton, one that had not previously worked with the town, changed the report from what Hart said was supposed to be just a “recommendation to correct” to a “significant deficiency.”

“We wanted to contest the finding but we would have had to file a third extension and I did not want to do this,” Hart said.

According to Hart, the “weakness that was reported was for year-end adjustments.”

At the recent Town Council meeting, auditors made a very brief presentation noting the “significant deficiency” in the WPCA accounting method.

Hart said, “in the past, the auditors have helped us make these adjustments.”

“As new standards in accounting are issued, things change. The auditors can no longer help us make those adjustments once they have started the auditing process,” she said.

Hart said the town had contracted with an audit firm that merged with Grant Thornton, which, she said, "caused a delay in the audit and they had to file two extensions."

"The individuals who actually performed the audit did not feel this was a significant deficiency and were just going to make a recommendation to correct this. Another auditor within the firm that we have never worked with changed the language to significant deficiency,” she said.

But at the meeting, auditors said there needs to be "more formal journal entry reviews for the WPCA." Auditors described the problem as a "weakness in internal controls." 

Significant deficiency or not, Hart said measures will be taken to “correct this weakness.”

“A couple of months before the auditors come in the do the audit, we will meet with them to go over all year-end adjustments. At this point, they will be able to advise us if additional journal entries need to be made,” Hart said.

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