The city of Norris missed a state deadline to have its 2021-22 fiscal year budget closed out by Sept. 1, and faces an “adverse finding” by its auditor because of the misstep, Mayor Chris Mitchell told the City Council on Monday night.
Then, on his recommendation, the council voted unanimously to seek an outside accountant to come in and get the budget reconciled so the city can move ahead with its state-mandated annual financial audit, which is due by Dec. 31.
Mitchell informed the council that the city had missed a “major milestone” by not having its “closing of the books” for the previous year completed within 60 days of the end of the fiscal year, which was June 30.
He said the city’s auditor suggested getting help, which Mitchell said could not be the same firm as the auditor.
“We need to hire an outside accounting firm to come in and close out the books,” the mayor said. “We need this. It will be a separate entity.”
Mitchell made it clear that the problem does not reflect on “the current [city] staff.”
He also noted, “This isn’t triggered by a mistake or any concern of fraud.”
The city has gone through several staff changes and updates in accounting software that have accounted for delays in producing monthly financial reports and the year-end closeout, and the hiring of a new city manager is expected to clear up the problem.
Scott Hackler, the former city manager, quit in June, and the council this month is trying again to hire a replacement.
As for the timetable for closing out the books, Mitchell said he expects that it “will take a month or two to get someone in,” adding that, “We need to be prepared [that] we will miss the Dec. 31 [audit] deadline.”
Mitchell said he could not put a timeline on how long the city might need to use the outside accounting firm.
“I want it to be where our [city] staff is comfortable [with handling the financial reports],” the mayor said.