“Audit Committee will improve our standing in the bond markets and reduce the risk of fraud and mismanagement.”
(West Warwick, RI) Nick Denice, a Certified Fraud Examiner and Pension Board Member, and Town Councilman David Gosselin are calling for the Town Council to establish a Town Audit Committee.
Each year, West Warwick is required by state law to conduct an audit to ensure that the Town’s financial statements adequately reflect its financial position. This process involves hiring an independent accounting firm to come in to the town and test the town’s processes with respect to compiling financial information, preventing waste and fraud, and using correct accounting policies and principles.
“The purpose of this committee will be to oversee the work of the Independent Auditors and assist the Town Council and School Committee in their oversight of the integrity of the Town’s financial statements and the Town’s system of internal controls and compliance,” states Denice. “Once the audit report is issued, the audit committee will follow up with Town management to ensure that any deficiencies in the Town’s processes are corrected moving forward.” The Audit Committee is responsible for keeping the Town focusing on identifying and mitigating risks, collaborating with the auditors on the Town’s risk assessment, ensuring accountability and compliance, and establishing a governance structure with respect to the expenditure of public funds.
Since the accounting reforms in the 2002 Sarbanes-Oxley Act, passed to remedy accounting scandals such as Enron, many cities and towns have followed the lead of the private sector. Denice notes that North Providence, North Kingstown, Middletown, and Cranston have adopted the measure. The proposed ordinance for West Warwick is based upon North Kingstown’s Committee. The Committee will consist of financial experts with professional designations such as Certified Public Accountants and Certified Fraud Examiners.
The ordinance, introduced by Town Councilman David Gosselin, has been developed in collaboration with Auditor General Dennis Hoyle, former Auditor General Ernest Almonte, the former Chief of the RI Bureau of Audits, the former North Kingstown Audit Committee Chairman, and the RI Society of Certified Public Accountants.
Gosselin and Denice note that “this ordinance will show the bond markets that West Warwick is concerned about improving our financial controls to prevent waste, fraud, and mismanagement. This is a pure good government move that will ensure that taxpayer money is used efficiently in tough economic times. It will provide oversight in an area that has been overlooked for far too long”
The ordinance will receive a first reading at the Town Council meeting this Tuesday, August 7th.