Shrewsbury Creates Audit Committee Over Council Objections

Shrewsbury's governing body has established an audit committee to review borough financial controls after much discussion and the objections of several members.

The Borough Council voted 4-2 at its regular meeting Tuesday night to create a three-member committee made up of council members who will convene at least quarterly. Councilmen Michael DeNofa and Peter Meyer voted against the resolution.

Councilman William Dodge, who moved the resolution to a vote, characterized the creation of the audit committee as a common-sense move that would enable the governing body to have more information on the borough's financial condition.

"The point is to put this body in position to review the process of the audit," he said. "I feel so strongly this borough is lacking a serious audit function."

DeNofa, however, felt the committee wasn't necessary at all.

"We hired an auditor who's a professional," DeNofa said. "I don't see why we need another committee."

The borough reappointed auditor Robert Allison of the firm Hutchins, Farrell, Meyer and Allison Tuesday night.

Meyer was more critical, saying an audit committee would simply be "another layer of bureaucratic BS.

"You're auditing the audit," Meyer said. "We don't need an audit committee."

Meyer and borough attorney Martin Barger also objected to the original composition of the committee, which was to be chaired by a member of the public approved by the council who would serve alongside two council members and the borough CFO.

"This is fraught with tremendous liability to the town," said Meyer, who believed an unelected citizen should not be granted access to internal contractual information and confidential information. Barger agreed, saying "if you bring an outside person in... I think it's a violation of the Sunshine Law," which governs what documents are fully public information. 

Dodge relented, agreeing to keep membership to elected officials. 

"The purpose of this committee is not to conduct an audit of the audit," he said. "There's no need to fear anything."

Council President Tom Menapace said the idea of an audit committee "made good sense.

"At the end of the day, an audit committee is to identify... fraud," Menapace said. "It's a tripwire."

Dodge agreed, adding "also that policies and procedures exist to prevent fraud."

The mission of the audit committee will be to:

"Adopt, staff and oversee best practices necessary to create a system of compliant internal financial controls governing budgets, the accurate and timely reporting of revenue raised and monies expended, and the development and maintenance of a strong moral and ethical culture among all borough officials and employees."

The committee will be tasked with, among other items: 

• Reviewing the borough's annual financial statements;
• Reviewing the audit process, opinion and findings;
• Seeking the approval of the Borough Council for the annual financial statements prepared and submitted by the independent auditor's opinion;
• Recommending to council that internal control weaknesses and other recommendations cited by the auditor are promptly addressed.