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Providence Fiscal Crisis: Audit Delayed

Friday, January 14, 2011

 

The City of Providence has delayed its audit—which would show just how deep its fiscal crisis is, according to documents obtained by GoLocalProv.

One city councilman blamed the delay on then-Mayor David Cicilline, accusing his administration of blocking access to information that might damage Cicilline’s run for Congress. Another former councilman said the delay was yet another example of how the past administration had mismanaged city finances.

“This is a part and parcel of the outgoing administration that I think contributed to the financial mess we’re in,” said former Councilman John Lombardi.

Claim: Administration was ‘stonewalling’ auditor

Councilman John Igliozzi claimed the delay was intentional. “They were holding back the information to help the political campaign of the administration,” said Igliozzi, chairman of the Finance Committee. “The independent auditor was not able to access the financial records of the City of Providence because the previous administration was stonewalling them, just like they were stonewalling the Internal Auditor’s office.”

Lombardi said the delay could hamper efforts by the newly inaugurated Mayor Angel Taveras to get a handle on city finances. “I think we can ill afford to delay,” said Lombardi, who ran for mayor in the last election. “We can’t really operate without knowing how deep the problem is.”

What would otherwise be a largely routine accounting process became much more significant as news of the city’s fiscal woes started to leak out of city hall in the fall. In late October, then-Internal Auditor James Lombardi issued a report warning that the city was running out of money and falling behind on its pension payments.

City missed deadline

The audit—which would show a complete financial picture of the city—was supposed to be done by December 31, but the city sent a Dec. 29 letter to the Office of the Auditor General—which collects the reports from all communities—asking for an extension to the end of January.

The independent auditor for the city, James Wilkinson, of Braver PC, said the city turned in most of the documents needed for the report in early November—about a month late—and around the time of the election. He said it was the first time the city had been tardy since his firm took it on as a client four years ago. While it is not unusual for cities and towns to request extensions (this year about a third did so) this is the first time Providence has done so in recent memory, according to the acting Auditor General, Dennis Hoyle.

Taveras committed to finishing audit

In the Dec. 29 letter former Director of Administration Rich Kerbel pointed to staff turnover as the main reason for the delay. In the fall, Finance Director Bruce Miller left his position and Kerbel has been serving as acting Finance Director since. Wilkinson said he agreed with Kerbel’s explanation and he declined to comment on Igliozzi’s accusation. Kerbel could not be reached for comment in time for publication.

A spokeswoman for the new mayor said he is committed to completing the audit by the January 31 deadline. “We fully expect the audit to be completed within that time frame. The Taveras administration is looking forward to having the audit report and integrating its findings into the Mayor's ongoing effort to evaluate the City's fiscal condition,” said Director of Communications Melissa Withers.
 

 

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