Despite Deficit, City Audit Shows Positive Financial Strides

The final figures are in, and while deficit spending in education has placed Woonsocket in a precarious financial position, there may still be some positive news to take away from the city's Comprehensive Annual Financial Report.

According to the audit provided by Braver PC, the Woonsocket Education Department (WED) overspent by $2.7 million during 2011 and the City General Fund finished the year with a $550,000 surplus, resulting in a total deficit of more than $2.1 million. The final report was sent to Finance Director Thomas Bruce Tuesday afternoon, and was filed with the national repository and forwarded to investment groups, ratings agencies and the state auditor general this morning. It can be viewed in its entirety on the City of Woonsocket's website.

Although the negative balance, and a lack of timely and accurate reporting by WED have place the city on a by Fitch Ratings, Woonsocket has been given a "Clean" audit for the first time in seven years. 

The unqualified opinion means that Braver had no problems or questions regarding the accuracy of the information provided by the city, and that Woonsocket provided complete figures in all fields including retirement benefits and infrastructure assets- the line item which projects the value of things like the city's roads, sidewalks and sewer system.

"For several years the city has not fulfilled certain requirements that we now are meeting," explained Bruce.

The report has also been completed on time for the first time in at least six years. The Dec. 31, 2011 reporting deadline for all cities and towns in Rhode Island was extended by three business days by the Auditor General's office to accommodate the New Year's holiday. The office received the report on the legal deadline of Jan. 3. around 5 p.m.

"It's helpful in our presentation that it was made on time," said Bruce.

Financial rating agencies will use the information to determine Woonsocket's - a grading that advises financial institutions if the city is a wise investment. The rating determines when and if the city can borrow money for projects (like Woonsocket's new water treatment plant,) and can affect the city's ability to refinance previous loans- including the $11.5 deficit spending bond taken out last year. Rating committees will examine the report and vote on Woonsocket's score, with decisions expected within the next few weeks.