Swampscott's FY25 audit is not posted fourteen months after year-end

← All news · September 8, 2026

The town's fiscal 2025 annual audit is not on the town's Audited Financials page. On Thursday, the Finance Committee takes up a separate $30,000 review that found water/sewer contract and purchase-order gaps.

Swampscott’s annual financial audit for fiscal 2025 is fourteen months past the June 30, 2025 close of the books, and it is not posted on the town’s own Audited Financials page.

Finance Director Patrick Luddy told the Select Board on Aug. 27 that he expected it “by Labor Day.” Labor Day was Monday, Sept. 7. As of Sept. 9, the report is not on the town’s page and is not on the agenda for Thursday’s Finance Committee meeting. On the record, the town can say only that the audit is “delayed,” in Luddy’s word, and expected soon. The public record does not establish whether a signed FY25 report has reached town hall. It shows only that the town has not posted one and did not put it on this week’s agendas.

The town’s posted audit page shows the delay has become a pattern. The FY23 report is dated Dec. 21, 2023, about six months after year-end; its transmittal letter names Powers & Sullivan, LLC of Wakefield as the auditor, and the signature itself is reproduced as an image. The FY24 report was signed by CBIZ CPAs P.C. of Boston on July 1, 2025, about twelve months after year-end. For FY25 there is nothing, at fourteen months and counting. Delivery has slid by half a year in two cycles.

FY25 is not the town’s first late audit. Elizabeth “Liz” Smith, now a Finance Committee member, told the May 2025 Annual Town Meeting that the FY24 audit was already four to five months overdue.

On Thursday, Sept. 10, the Finance Committee takes up a different audit: the $30,000 “transitional audit” Town Meeting ordered in May 2025 of the town’s water and sewer enterprise funds, procurement, and recreation revolving fund. CliftonLarsonAllen (CLA) delivered that review at the end of June. It found water and sewer spending on contracts more than five years old, missing or expired contracts, and incomplete purchase orders.

The two reports are different tools. The late annual audit is built to give an opinion on the town’s financial statements. The transitional audit was an agreed-upon-procedures review, not a full audit, and found procurement gaps the annual audit had not surfaced.

The audits test different things

Luddy drew the distinction himself. “This is what in the accounting world they call an [agreed-upon] procedures engagement, so they’re looking at how we are applying the procedures we have in place and what the results are of that,” he told the board. “The annual audit we do is preparation of financial statements and auditing our reporting to make sure there’s no material misstatement in our financials.” The transcript renders “agreed-upon” as “applied,” a transcription artifact.

In professional terms, and as context rather than advice: an annual municipal audit is an opinion under generally accepted auditing standards on whether the financial statements are fairly presented in all material respects. It samples a share of transactions and reports internal-control problems only when they rise to a “material weakness” or “significant deficiency.” An agreed-upon-procedures engagement, under AICPA standard AT-C 215, gives no opinion at all. The town specifies the procedures, and the auditor reports what it found against them.

A board member said past annual audits had turned up nothing on procurement, except possibly a single purchase-order item about five years earlier, and pressed on why. Another member suggested the two engagements pull different samples. Luddy drew the distinction between an agreed-upon-procedures engagement and a financial-statement audit and agreed the annual auditors “may not be sampling procurement in the same manner.” A member paraphrased the transitional review as “more back-checking to say you did what you did … not looking in necessarily at the processes.” Diarization across the four-hour meeting rotates speaker tags, so attributions here rest on who was addressed and by role.

CLA found old contracts and incomplete purchase orders

The water and sewer finding was not lost or unaccounted-for water. Luddy was careful to say so. The funds’ declining retained earnings came from “consumption projections that were misaligned with actual consumption for multiple fiscal years.” The assumptions used to set rates did not match what was actually metered and billed. When a member asked whether the problem was leakage or the gap between the MWRA meter and household meters, Luddy said no: “projection versus actual.”

On procurement, CLA sampled water and sewer spending across three fiscal years and found expenditures on contracts more than five years old, missing or expired contracts, and “a lack of evidence of formal procurement for some of the expenditures that were sampled.” Luddy said “generally a municipality can’t award a contract that exceeds five years” without an amendment.

As professional context, the state’s procurement law, Chapter 30B, sets a default contract-term limit of three years, with longer terms allowed by governing-body authorization. The “five years” is Luddy’s framing of the finding, not a stated legal maximum. The procurement testing was limited to the water and sewer funds, not the whole town.

The recreation revolving fund findings were record-keeping issues, not missing money. Employee fringe costs had not been charged to the fund, which is to be corrected in FY27. The fund’s spending limit was not recorded in the accounting system. Its expenditure detail and staff training could be improved. Members also noted recreation enrollment was up about 22 percent, from about 3,100 to nearly 3,900 participants.

Town Meeting authorized up to $30,000 for the review in May 2025. The Select Board had voted 4-1 not to recommend it. Precinct 1 Town Meeting member Jerry Perry championed the article; he had flagged the water and sewer funds’ decline at the December 2024 Special Town Meeting.

Whether the final bill reached the full $30,000 is not settled on the record. A town official answering for the administration said the town was “very close to it if we’re not there yet.” The CLA report itself, and a response memo the board said it would post, were not found on the town website in a headless search as of Sept. 9. The findings above come through Luddy’s presentation to the board.

A late audit can affect credit review

A late annual audit matters most for the town’s standing with creditors. When Swampscott sells long-term bonds, it makes continuing-disclosure promises under SEC Rule 15c2-12 to file audited financial statements. A persistent delay can bear on credit review and on the town’s ability to issue debt.

That is professional context. The town’s specific promised filing date is not in the public record reviewed here, and no one on the record named a dollar cost for the delay.

The delay does not control two separate processes. The federal Single Audit is a separate obligation that applies when a government spends over a federal threshold. The state’s free-cash certification rests on the balance sheet the town files with the Department of Revenue, not on the audit. Luddy’s timeline for that runs separately: balance sheet to DOR in September, free cash certified by about the end of October, and the Schedule A in November.

A board member pressed on whether the auditor was “out of their contract terms,” asking about “the expected deliverable and a delivery date and a … reconciliation penalty clause,” and called the gap “a significant delay.” The town is “not the only community … having this problem with our provider,” an official said, and “will explore all opportunities to recoup costs.”

The auditor changed during the contract

Swampscott did not switch auditors between FY23 and FY24. The firm changed under it. The FY22 and FY23 transmittal letters name Powers & Sullivan, LLC, the long-time North Shore municipal auditor based in Wakefield. The FY24 report is signed by CBIZ CPAs P.C. in Boston.

“The firm was acquired twice throughout the engagement,” Luddy said. “So that has created a lot of delay.” The specific corporate chain behind that is industry history, not town record. What the town’s own reports show is two different firms on one continuing engagement: a Wakefield firm named in the FY22 and FY23 transmittal letters, and a Boston firm’s signature block on FY24.

Luddy said this is the final year of the current contract and that a request for proposals for the FY26 audit is out now, meaning the FY26 audit could be done by a firm the town actually chooses. He said he expects it “done well in advance of … I would say March.”

The Finance Committee has not posted minutes

The Finance Committee meets Thursday at 6:30 p.m. in the third-floor conference room at 22 Monument Ave., with a Microsoft Teams option. Its agenda’s two substantive items are the FY2026 year-end and the transitional-audit report, its first posted review of the CLA findings.

Eric Hartmann chairs the committee. The seven-member committee also includes Vice Chair Erik Schneider, Naomi Dreeben, Jarred Guthrie, Greg McDonald, Cinder McNerney and Elizabeth “Liz” Smith. Luddy is its staff liaison.

The ordinary public record of the meeting will be thin unless the committee changes its practice. The Finance Committee posts its agendas to the town’s Agenda Center but no minutes there: eighteen agendas and zero minutes in the 2026 cache. Its meetings are not on the town’s video record. The standing “Approval of minutes” line on Thursday’s agenda shows minutes are kept somewhere; they are simply not posted.

If that practice holds, a resident who wants to know what the committee said about either audit will have to attend, rely on the press, or file a records request.

Smith has already fought the town over access to records. In May 2025 she filed an Open Meeting Law and public-records complaint seeking the release of the town’s withheld executive-session minutes. She now sits on a body that posts its agendas and not its minutes.

Sources

Notes on limits. The town’s page shows no FY25 report as of Sept. 9 and FY25 was not on the Sept. 8 or Sept. 10 agendas; this piece does not assert that a signed FY25 audit has or has not been delivered to the town. The Sept. 8 Select Board transcript is not in the corpus, so nothing here rests on what the Town Administrator’s report did or did not say. The Powers & Sullivan → CBIZ corporate chain is industry background, not town record; the piece relies on the two signatures and Luddy’s “acquired twice.” “March” is Luddy’s target, not established as a legal deadline. Statutes and professional standards (SEC Rule 15c2-12, the federal Single Audit, AICPA AT-C 215, GAAS/GAGAS, c. 30B) are labeled as legal/professional context, not advice.

Correction and addendum (2026-09-09, 06:00)

Post-publication verification against the Aug. 27 transcript (8t_c8N5wCDA.txt) and the town’s posted audit reports found four errors, corrected in the text above:

  1. The FY22 and FY23 reports do not carry a readable signature — the signature is an image, and the auditor’s name for those years comes from the transmittal letters (data/reference/audit-record-2026-09-09.md). “Signed by” and “two different signatures” have been replaced with what the documents actually show.
  2. The “very close to it if we’re not there yet” line (transcript l. 6655) has no self-introduction or name-address on the record; it is now attributed by role, not to the Town Administrator by name.
  3. The statement that past annual audits had never flagged procurement was a board member’s (l. 6739), not Luddy’s; Luddy’s contribution was the engagement-type distinction (l. 6772–6786). The paragraph now says so.
  4. The transitional audit’s sample years are not on the record (“over three years” is the scope Town Meeting approved); “fiscal 2023 through 2025” was an inference and has been removed.

One precision edit: the Finance Committee’s Sept. 10 agenda lists five items, two of them substantive. Four citations in the “professional context” paragraph (AICPA AT-C 215, SEC Rule 15c2-12, the federal Single Audit threshold, c. 30B’s three-year default) have no cached source in this repository and stand as unverified professional context. Since publication, the Sept. 8 Select Board transcript (CIgSIXBiVUQ) has been recovered; the word “audit” does not occur in it — the Town Administrator’s report that night did not mention the FY25 audit.