Hey remember the Bloomberg story last March about how staff shortages at audit firms were causing municipal credit ratings to tank? Refresher:
Municipalities across the US are at risk of having their credit ratings downgraded or withdrawn by S&P Global Ratings because staffing shortages have delayed financial disclosure documents.
S&P has placed 149 long-term, underlying and program ratings on a negative credit watch this year because the ratings company hasn’t received 2021 financial statements from the issuers. That’s the most since at least 2018, and materially higher than the prior five-year average of 95 such moves, according to S&P data.
Ten months after that story, here’s a specific tale out of Wyoming.
The city of Sheridan and Sheridan County’s FY2023 audits will come in after the state-mandated deadline.
Both the city and county utilize the services of Porter, Muirhead, Cornia and Howard (PMCH) — a certified public accountant based in Casper — for their audits. The firm works with the local governments to compile information for the audit throughout the year.
Holding up the audit this year, Duff said, is short-staffing at PMCH, as the firm competes with other accounting firms across the nation for employees. He also said the county’s audit has been delayed previously for the same reason.
PMCH’s hometown of Casper is 149 miles from Sheridan, a town with a population of 18,737 just south of the Montana border.
The late audit was due on the 31st of December. NBD on the county’s end though, Sheridan County Administrative Director Cameron Duff told the Press the lateness is fine as long as they have an engagement letter with a CPA firm which they do. “We have that on file with the state. So, we’re good on that aspect because we are not the ones holding up the audit,” Duff said. Burn.
On the billing side, the Press said Sheridan County will pay PMCH about $86,000 for the services; the city of Sheridan was billed $127,000. This is, of course, only a ballpark and could end up higher if a bunch of out of scope services get tacked on. The city of Sheridan is set to pay the firm about $127,000. The actual cost will be determined once the final audits are submitted. According to city of Sheridan treasurer Karen Burtis, they were billed an additional $20,000 by PMCH this year due to the city changing its accounting software and the firm updating its records.
Sheridan County will engage PMCH again next year, they said, but it’s not like they have much of a choice. According to the Press, there are only two firms in the entirety of Wyoming that can do government audits. The other appears to be ClingerHagerman, LLC of Laramie which offers “2080 hour contracts with paid overtime or the option to be used as paid time off” to staff according to LinkedIn.
PMCH has opening for audit manager listed on its website, there is no salary figure listed though they do say they offer “a competitive compensation package commensurate with qualifications and experience as well as significant opportunities for advancement.”
City, county audits delayed [The Sheridan Press]