Audit Objective
Did City of Ithaca (City) officials maintain complete, accurate and timely accounting records and reports?
Audit Period
January 1, 2023 – November 14, 2024.
We extended the audit period back to January 1, 2020, to review independent audits and financial reporting and forward to January 29, 2026, to update the City’s financial reporting status and review the most recently filed independent audit report.
Understanding the Audit Area
The Common Council (Council) is responsible for managing and controlling the City’s financial operations and must adequately oversee the City’s financial operations to ensure that public funds are managed with accountability, transparency and integrity. Maintaining complete, accurate and timely accounting records and reports ensures appropriate information is available for City officials tasked with overseeing the use of public funds. This critical function can help maintain public trust, ensure compliance with legal requirements and prevent mismanagement, waste and fraud.
The City’s 2025 general fund appropriations totaled $85.1 million.
Audit Summary
Although transactions recorded in the accounting records and reports we reviewed were generally accurate (e.g., recorded transaction details such as payees, check numbers and amounts were correct), City officials did not maintain complete (e.g., certain transactions were not recorded) and timely accounting records and reports. In addition, we determined the City Controller’s (Controller) office did not create or provide the Council with monthly reports such as budget-to-actual comparisons, cash balances or fund balance estimates and the City Manager (Manager) did not provide year-end financial reports to the Council. Furthermore, officials did not submit Annual Financial Reports (AFRs) to the Office of the State Comptroller (OSC) in accordance with New York State General Municipal Law (Law) Section 301 or ensure independent audits were completed in a timely manner.
The lack of complete and timely monthly and annual financial reports inhibits the Council’s ability to properly and effectively manage the City’s financial operations throughout the year. As a result of the incomplete financial records, the Council and officials’ ability to assess the City’s financial standing since December 2022 and make informed financial decisions was impaired.
For example, the Finance Department’s staff did not record over 4,000 transactions, totaling $10 million in a timely manner, with delays ranging from 31 to 282 days after the transaction date. Additionally, they did not record Council-authorized budget adjustments totaling over $1 million. Furthermore, the City Chamberlain’s (Chamberlain) office staff did not complete bank reconciliations in a timely manner for all City bank accounts with combined balances of approximately $51 million as of February 28, 2025.
The report includes 11 recommendations that, if implemented, will improve the City’s accounting records and reports and the Council’s ability to manage the City’s financial condition. City officials generally agreed with our findings and indicated they plan to initiate corrective action.
We conducted this audit pursuant to Article V, Section 1 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of GML. Our methodology and standards are included in Appendix C.
The Council has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of the New York State General Municipal Law. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Council to make the CAP available for public review in the City Clerk’s office.
1 More information on AFR non-filers and the City’s current AFR filing status can be found on OSC’s website at https://web.osc.state.ny.us/localgov/afr-non-filers/ .