Financial Audit Advisory Committee - October 7, 2026

The Financial Audit Advisory Committee of Newton met on October 7, 2026, for an update from the city’s external auditors, CLA, on the FY2026 audit. Fieldwork was underway and on schedule, with draft financial statements expected for the December meeting. The auditors noted that ARPA and City Hall improvements would no longer be presented as major funds, and that GASB Statement 103 will require changes to the financial-statement management discussion and analysis. The retirement system’s net pension liability declined from $275 million to $248 million, primarily due to investment gains; its discount rate decreased from 6.9% to 6.75%. The estimated federal-award expenditure total was $23.5 million, with ARPA, special education, and an assistance-to-firefighters grant identified as major audit programs. Testing to date had found no issues, though the auditors were awaiting the federal compliance supplement. Special reviews of tree preservation and Newton North and Newton South athletics also produced no recommendations.

The committee discussed two prior IT audit recommendations, concerning Munis user access and disaster recovery; review remained in progress, with an update expected in December. The auditors said future IT concerns may be communicated verbally to management rather than as written recommendations. The city reported that about $2.5 million of its $63.6 million in ARPA funds remained unexpended and was expected to be spent by the December 31, 2026 deadline; otherwise, funds would need to be returned to the federal government. No procurement actions, contract awards, or purchasing votes were identified. The next meeting was tentatively scheduled for December 9 at 9:00 a.m.