Groton receives clean audit for the 2017 fiscal year

Groton — Groton received a "clean" audit on Tuesday, meaning the town fairly and accurately presented its financial books for the 2017 fiscal year, and money provided to the town through state and federal grants was appropriately spent.

Blum, Shapiro & Company of West Hartford presented the fiscal year 2017 Comprehensive Annual Financial Report to the Town Council, along with audits of state and federal monies provided to Groton.

The annual financial report showed the town’s general fund balance increased by about $1 million during the last fiscal year and that Groton holds an unassigned fund balance equal to 9.6 percent of its annual budget.

Revenues were under budget by $142,000 and expenses were under budget by $1.41 million, the report showed.

Debt for the town decreased $6 million due to debt payments, and the town’s pension liability decreased, the audit showed.

The undesignated fund balance is significant because bond rating houses look at it when evaluating the credit of a municipality. In October, Moody’s said it would review 29 municipalities in the state, including Groton, for a potential downgrade of their credit ratings.

Moody's confirmed Groton’s credit rating in December, citing a strong tax base and vibrant local economy, as well as "the town's low tax rate and demonstrated willingness to raise the levy." But the rating agency gave the town a “negative outlook” because of difficulty balancing spending and revenue and “the town's intention to substantially increase its debt load in the near future, potentially putting pressure on the budget.” 

Growth in the town’s fund balances and tax base could increase the town’s rating, while declining reserves or significant cuts in state aid could damage it, the rating agency said. 


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