Pictured is Carl Widmer with Drescher and Malecki, who presented the 2023 audit findings from their firm to the city council during their most recent work session. P-J photo by Sara Holthouse

As expected, Jamestown’s 2023 budget finished the year out of balance by $923,000.

The audited amount confirms what Mayor Kim Ecklund told City Council members during the 2025 budget process when she advised council members not to expect additional unexpended money to be available from the 2023 budget as council members tried to whittle down a tax increase in the 2025 spending plan.

“That means the fund balance of the general fund decreased by $923,000 as a result of the operations in fiscal year 2023,” said auditor Carl Widmer of Drescher and Malecki.

The budget being out of balance isn’t a surprise. Joe Bellitto, former city comptroller, raised concerns about the 2023 and 2024 budgets back in December 2023 after being asked to review the budgets by Mayor Kim Ecklund after she won the 2023 election. Bellitto raised issues with state aid that was unlikely to be collected, employee health and dental insurance rates that were lower than they should have been, employee retirement contributions that were too low to reflect new state rates. Many of those issues persisted in the 2024 budget and were eventually corrected as part of the 2025 budget.

Widmer briefly discussed the city’s funds included, including a spike of activity as an revenue spike as the city used its American Rescue Plan Act money outside of the typical annual operations as a part of the five years of revenues versus expenditures, five years of the city’s fund balance. The city’s surplus stands at $8.3 million total with $7.1 million unassigned.

Widmer acknowledged that the 2023 audit was finished later than a municipality usually sees a typical audit finished, saying that the 2022 audit was significantly delayed and it had been originally anticipated that the 2023 one would go quicker, but that the city was not ready for auditors until December 2024. Widmer went over the items in the presentation in greater detail during the Finance Committee meeting, giving an expedited version to the work session for the full council.

“There is of course the basic financial statements, that’s the primary deliverable that comes out of the audit process,” Widmer said. “In addition to the financial statements is a single audit, that’s a special compliance audit that we perform for the city. That’s related to the amount of federal awards that the city receives and then spends through programs.”

The largest amount for that comes from the ARPA money, and for fiscal year 2023, Widmer said the city spent just shy of $10 million using the ARPA money, which is why that program was selected for audit testing by their firm.

Because the city receives and uses money from the state Department of Transportation, Widmer said a special state compliance audit is also performed for that. Widmer added that all documents involved in the audit are the city’s documents from throughout the year, and belong to the city.

“While we help compile that document, they’re not the auditor’s financial statements, they’re the city’s financial statements,” Widmer said. “We’re hired to perform an audit over the amounts and the note disclosures that are in that document. So, the only thing that we take ownership for are those that are on our letterhead, and that’s called our professional opinion.”

Widmer said having this professional opinion as something separate from the city is important so that anyone who looks at the city’s financial statements can be sure that the numbers are accurate, and that it is imperative that the firm is independent from the city.

Widmer said that as these observations and financials are historical, this audit will help the city to look at ways to improve next year.

“We take a look at how the city can improve, how can the city do this turnaround quicker for next year’s audit,” Widmer said. “There are similar communications for our audit of 2022.”

Widmer said the city needs some checks and balances and more staff to be involved in critical cycles so that one person can perform the process and another can review and approve it. He outlined the opportunity for risk or potential fraud when one person is doing most of the work.

“We don’t perform an audit looking for fraud, that would be a forensic auditor, but we are certainly mindful of it during the performance of our audit,” Widmer said. “Nothing came to our attention, but it’s our job to communicate to the group where risks may lie, and that’s a risk.”

Widmer also noted the city’s timeline of being behind in submitting these audits, and that speeding up the timeline has been a challenge. Widmer welcomed any questions or communications, saying that his firm is contracted for the 2024 audit, with regular communications planned and with plans to look to improve for the next audit.