At their regular meeting, Milford City Council accepted the final FY24 audit report completed by Zelonkofske Axelrod LLC (ZA). According to Lou Vitola, City Finance Director, the city received a “clean audit” which is the highest order of opinion an auditor can issue. The official term is unqualified opinion and although it does not mean the auditor found the city’s books to be perfect, there were no significant issues and all notations made could be addressed with new policies.
“The audit is late and that is a comment that is going to persist with the audit until we are caught up with Fiscal 2026,” Vitola said. “The auditors had a note about bank reconciliations during the FY24 year and that is one we are very much on top of for the FY 2025 audit. There are some suggestions that don’t even rise to comments. For example, a few years ago, the auditors suggested we consolidate the number of city funds. We had 43 funds and with the new Tyler finance and accounting system, got those boiled down to 18.”
The consolidation of funds was another factor that delayed the FY 24 audit as the consolidation had to be reported in the audit as a separate engagement. Vitola called it a “mountain of a job.” Vitola stated there were a lot of journal entries that year which the city was trying to get down to no more than half a dozen.
“The city is growing and we are controlling expenses, we’re budgeting well and it really is as simple as that,” Vitola said. “The auditors did note that during the Finance and Audit Committee presentation that the net position of the city’s pension flipped from an asset to a liability this year. That sounds scary, but the normal state I would say, is that city’s pension line is likely to be a liability. A couple of years ago it was an asset, but as a result of some unusual circumstances, returns in the market were strong expectations of actuaries that made more conservative estimates than had born out and we flipped to an asset which is unusual, so we knew it would flip back to a liability.”
After the presentation, Councilman Jason James commended Vitola for his work and thorough explanations of the audit process.
“One of the important things Lou said was that there was a very thorough conversation with the auditors and the dialog was great,” James said. “One of the main things was the investments and the presentation of the cash and we were able to have a dialog in the way our investments are set intentionally and how it is tied to the liquidity needs of the city, and give us the earning opportunity at the same time what the cash is used for and that it generates use for other things.”
James felt that the city was doing the right thing internally to keep the city in a great financial position. The audit report was approved by council with a vote of eight to zero.
The auditors letter can be found online and the audit report is also available on the city website.
