Auditor of State - the gift that keeps on giving

Despite Mayor Williams’ and Finance Committee member Keith Moore’s publicly stated misgivings about the free services provided by the Auditor of State under fiscal watch, city officials have made another request for their assistance. A letter dated 8/17/06 from the AOS to council is essentially a contract for the Local Government Services Section to provide the city with $18,000 worth of services. It carefully outlines the terms and conditions of an agreement that was hammered out in in a recent Finance Committee meeting Dave Thompson from the LGS Section attended.

Excerpts from the 8/17/06 letter:

We will examine…the forecasted cash basis statement of the revenues, expenditures, and changes in fund balance of the general fund and the summaries of significant forecast assumptions and accounting policies of the City of Norwood for the years ending December 31, 2006 and 2007. We will examine the financial forecast for the purpose of issuing a report stating whether, in our opinion, (a) management’s financial forecast is presented in conformity with the applicable guidelines established by the American Institute of Certified Public Accountants and (b) management’s assumptions provide a reasonable basis for its forecast.

…At the conclusion of the engagement, management agrees to supply us with a representation letter, which…will confirm management’s responsibility for the underlying assumptions and the appropriateness of the financials forecast and its presentation.

If management intends to reproduce and publish the forecast and our report thereon, they must be reproduced in their entirety.

…The cost of this engagement is not anticipated to exceed $18,000 and will be paid from an appropriation made by the Ohio General Assembly. Our estimate is based on anticipated cooperation from City personnel and the assumption that City's management will provide suitable support for the assumptions and amounts presented in the forecast.

According to an LGS official, this letter is standard fare whenever a municipality requests examination of its forecasts. A resolution formalizing the arrangement is on the 9/12/06 council agenda. When the examination of Norwood’s 2006 and 2007 forecasts is complete, which is expected to take about 2 months, the AOS Public Affairs office will notify the media. At that time, the report will be available to the public.