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Searsport is years behind on its annual audits of municipal finances, which local officials fear could make it harder to secure financing for town projects.
The midcoast community is now pushing its accountant to complete his annual review and report on the town’s 2023 finances, and Select Board members are expected to raise the issue with him at a Sept. 16 meeting. The accountant also still needs to complete audits for more recent fiscal years as well.
Searsport is not alone in falling behind on its audits, which are annually conducted to show that municipalities are responsibly and transparently spending taxpayer dollars. According to state records, dozens of other towns and cities have not yet received their audits for 2023 or earlier.
The backlogs, which are in part related to staffing shortages in the accounting industry, can hinder communities as they try to maintain municipal services and seek federal funding, according to Maine’s state auditor, Matt Dunlap. If left undone for long enough, the consequences can be severe. Delays can jeopardize school funding and, for towns that rely on credit to finance bonded projects, even result in banks cutting off that credit.
“The real penalty is the net effect,” Dunlap said.
Searsport officials are growing frustrated about the delays in their own audits and have been pushing their certified public accountant — Fred Brewer — to finish the one for 2023. While the town is not currently at risk of losing out on federal funds, Town Manager James Gillway said the lack of updated reports nevertheless makes things harder. It does have plans to seek state funding for rebuilding a local wharf area, potentially in the next six months.
“All of our funding agencies require seeing our financials,” Gillway said. “We have received a limited amount of information for financials to be able to secure loans and things like that, but the actual audit, the document that we need to put on the shelf, is just not here.”
The number of certified public accountants in Maine has dropped in the last five years. The state currently lists just 16 municipal auditing firms, while there are more than 400 municipalities requiring those services.
In an interview, Brewer pointed to the shortage of certified accountants as one reason for the backlog. As with many industries in Maine, it is exacerbated by the fact that many are aging and retiring, and fewer are stepping in to take their place. Brewer also said the flood of pandemic relief funding starting in 2020 has added extra work for tracking municipal finances in recent years.
“There are more requirements that we have to meet according to professional standards,” Brewer said. “More time, fewer people doing it. It’s this tough situation where there is a labor shortage and it’s harder to find people to do this stuff.”
