In another step towards fiscal sustainability, Syracuse Mayor Ben Walsh announced the City of Syracuse received an independent audit report free of “material weaknesses” in internal financial controls. This is the first time since outside auditors began rating internal controls that the City did not receive such a finding.
“It’s hard to operate without reliable financial information. Imagine not being able to balance your checkbook or recognize if someone was using your ATM card,” said Walsh. “Having material weaknesses meant the City was at greater risk for errors and added to the difficulty of accurately monitoring our financial condition on a timely basis.”
The City’s independent auditor, the Bonadio Group, issued its annual audit report for 2019-20 to the Walsh administration earlier this month. Auditors examined financial practices for a wide range of functions, including systems and procedures for everything from receiving and making payments, to timekeeping for overtime, to issuing bonds for large capital projects. According to the report, “during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses.”
A material weakness, according to the Public Company Accounting Oversight Board, is “a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.”
“For over a decade, the City of Syracuse received findings of material weaknesses in its annual audit. It was a streak that I was determined to break when I took office,” said Mayor Walsh. “We knew the City couldn’t achieve fiscal sustainability while repeatedly receiving reports that our financial systems were weak. Our team set a goal of reducing material weaknesses and with assistance from employees across city government, outside auditors found none in their review of fiscal year 2019-20.”
Under Mayor Walsh, the City’s fiscal sustainability has consistently improved. In each of the Administration’s proposed budgets, it improved the accuracy of budgeting and reduced projected deficits. Prior to the arrival of the COVID-19 pandemic, the City was actually projecting a $1.5 million budget surplus. The Administration’s work in coordination with the Syracuse Common Council to protect the City’s fund balance enabled the City to draw on its reserves in two budget years to lessen the impact of COVID-19 revenue losses on city services and employees.
In 2019, Standard & Poors Global Ratings (S&P) upgraded its outlook for the City to Stable from what had been Negative. S&P and Moody’s both maintained the City’s ratings in 2020 despite the challenges presented to municipalities by the pandemic.
“We have a lot more work to do, but this audit is another indicator that Syracuse is heading in the right direction,” Walsh said.