The Town of Littleton has made progress on its financial issues since town officials first appeared at the April Local Government Commission (LGC) meeting, according to town officials.
Littleton Mayor Heidi Hogan told LGC officials at their meeting on Tuesday that the town had finally submitted its 2021 audit this past weekend.
At April’s meeting, Denise Canada, director of the State and Local Government Finance Division and secretary of the LGC, Littleton was the furthest behind on submitting an annual audit than any other local government unit in the state.
As a result, it has raised issues with the LGC about whether the town has financial transparency, can manage public funds, and can operate water and sewer systems, especially with $15 million in appropriations from the General Assembly and $8 million in grants.
After the last audit was submitted, the town’s former auditor informed them they would no longer be offering their services to the town. That led them to engage with a third-party accountant, who found that there were several unreported journal entries that were not recorded in the accounting system, which itself didn’t reconcile with the utility billing system.
The town also faced other challenges, including the loss of its long-term financial officer. A new financial officer was brought in but didn’t have training in the accounting software. Part-time staff have also been trying to provide day-to-day services, including managing the water and sewer billing system and utilities.
The third-party accountant prepared a 2021 trial balance and provided it to the new auditor the town recently hired, who has a history of assisting units that are behind. The auditor told the LGC that the audit was substantially done and just needed a few more adjustments.
Additionally, the town’s water and sewer system’s licensed operator left in 2021 and engaged with the Roanoke Rapids Sanitary District to provide the service, initially for a six-month contract, but is still providing it.
“I almost can’t say the words the audit was submitted and waiting that long to exhale was tough, let me tell you, and again I think you prompted me, and the others,” Hogan said on Tuesday. “We thought we were being aggressive, and we were being careful, and we were being too careful. We needed to push our aggressiveness.”
She said they had many hurdles to overcome, including difficulty finding someone to perform audits during tax season, and thanked the LGC for pushing them in the right direction.
Hogan also praised Joe Durham, Municipal Operations Consultant for the North Carolina League of Municipalities, who helped the town find ways to finance both the audits and the finance director position. They interviewed 10 applicants and are currently offering the position to one of them.
The mayor also said they are moving forward on the town’s budget and the regionalization of the water and sewer systems with Halifax County.
The county and its officials, including their attorney, met with the town and its officials and attorney, and both sets of attorneys are working to formalize an agreement.
Hogan said the state grant funding is on track to be used for the sewer plant project, which is set to be completed before the February due date.
The town also had a meeting with Roanoke Rapids Sanitary District, North Carolina Regional Councils of Government (COGS), Halifax County Public Works, and an engineering firm that involved mapping out the town’s entire water line system. A lot of lines need to be upgraded or removed, and grant money will be used to remove the oldest lines and fix the two worst pump stations.
Beverly Stroud, who had helped the town with the 2021 audit, said she has talked with two potential auditors who could work with the town. She said they are hopeful of completing the 2022 audit sometime this summer and the 2023 audit by the end of the year or the beginning of 2027.
Canada asked Littleton officials to come back in about four months to give a progress report, which is about the same time they will be back to discuss sales tax withholding appeals for late audits.