Dewey commissioners accept audited financials

Dewey Beach commissioners voted unanimously Sept. 10 to accept the town’s audited financials for the 2020-21 fiscal year.

Audit Committee Chair Julie Johnson said she received the final report from auditor Cohn Reznick Aug. 13.

“We are pleased to announce that the audit went very well,” Johnson said. “This was our third year with Cohn Reznick, and we are very pleased with how they've handled the audit the last three years.”

Johnson said the town will have to requests bids for next year’s audit because Cohn Reznick’s contract expires, but she expects the firm to bid again for the contract.

The town’s fund balances increased by $1.78 million during the fiscal year, mainly attributable to overall revenues, the audit states. 

As of March 31, the total net position of the town is $11.4 million, of which $3.8 is unrestricted, the audit states. About $1.8 million is not available for spending, as it is invested in capital assets. Of the remaining $9.6 million, about $5.7 million is restricted for specific use.

General fund revenues exceeded the budget by nearly $837,000, mostly because transfer tax income exceeded the budget by about $1 million, and licenses, permits and fees were under budget by about $272,000, the audit states.

Expenses exceeded the budget by about $212,000, the audit states, mainly because capital outlay was over budget by about $219,000, and debt service payments were over budget by about $77,000.

For fiscal year 2022, the town has budgeted $3.8 million in revenues and $3.5 million in expenses, the audit states.

In internal control findings, auditors noted a repeat finding that many processes aren’t formally documented to delineate responsibility, and that accounting records required a material adjustment consisting of a correction to the general fund of about $207,000. Auditors recommended hiring a financial director.

In response, town management said developing procedures was hindered due to short staffing and lack of a town manager for six months. In March, the town said, it offered employment to a financial director who later rejected the offer. Town officials say they anticipate posting the open position in October.

In a repeat finding, auditors stated the town had not prepared a written information technology assessment, making it vulnerable to IT threats and risks. In response, town management stated it would search for an IT security consultant to mitigate and address vulnerabilities by November.

In a Sept. 15 email, Town Manager Bill Zolper said it’s important to note the 2021 budget occurred during COVID conditions, which affected town revenue and were likely the reason the town was under budget with licenses, permits, and other fees. Dewey Beach also didn’t have a full-time town manager from August until February, Zolper said, noting he worked only two months in the position before the end of the fiscal year.

The complete 47-page audit is available at townofdeweybeach.com.