Key Points
- The BOF voted 4-1 to exclude selectmen from its new audit-remediation subcommittee, reversing its July decision to give one BOS member a seat.
- BOF members cited independence and conflict-of-interest concerns, with Kim Healy arguing that the BOS oversees the administration implementing corrective actions that the BOF committee will evaluate.
- The dispute comes amid continuing financial concerns, including unresolved audit deficiencies and a FY25 audit now expected in early September after missing its deadline.
Why It Matters: The committee is intended to ensure Wilton follows through on audit corrections. Who has voting authority on that oversight body affects its independence, accountability and public confidence as the town continues addressing financial-process problems.
Citing conflict-of-interest concerns and the need for independent financial oversight, the Board of Finance voted Tuesday, Aug. 11, to exclude Board of Selectmen members from its newly created audit-remediation subcommittee — reversing a decision the BOF made just last month to give one selectman a seat.
The 4-1 decision comes as Wilton continues confronting financial process and oversight concerns at Town Hall, including unresolved deficiencies identified in previous audits and the delayed completion of the Fiscal Year 2025 audit. Just days earlier, members of the Board of Selectmen raised their own concerns about financial process when they approved a contract for rescheduled fireworks without having a finalized plan for funding all of the event’s nearly $35,000 in anticipated costs.
The BOF created the Temporary Audit Remediation and Financial Reporting Subcommittee on July 14 to monitor the town’s response to issues identified in its state-mandated audit reports — in particular the recommendations of the outside auditors CliftonLarsonAllen LLP presented to the Board of Selectmen and town administration — and whether recommended corrective actions to improve financial processes are implemented.
The subcommittee was the brainchild of BOF member Kim Healy, who initially argued last month that including members of the BOS on the panel would create an inherent conflict of interest because the BOS oversees the administration responsible for implementing those financial procedures and corrective actions.
At the urging of BOF Chair Tim Birch and Vice Chair Rudy Escalante, however, Healy agreed to a compromise that included one BOS member in the unanimously approved subcommittee structure.
Since then, Birch said he received emails from individual members of the BOS and First Selectman Toni Boucher requesting that two BOS members be included on the subcommittee.
At Tuesday’s meeting, Healy reversed course again, saying that after further research and reflection — and partially inspired by public opinion — she was again strongly recommending that no BOS member serve on the audit subcommittee. Birch also changed his position following both public comment and additional details Healy provided Tuesday.
Escalante maintained his support for BOS membership, and in a 4-1 vote, with Escalante opposed, the BOF voted to remove the selectmen’s seat from the committee.
Conflict of Interest
In making her argument against including members of the BOS, Healy cited a “Best Practice on Audit Committees” published by the national Government Finance Officers Association (GFOA), which promotes improvements in the methods of governmental financing through education and networking. She noted that Wilton Chief Financial Officer Dawn Savo currently serves as president of the organization’s Connecticut chapter.
Healy said the GFOA guidance supported her argument that including members of the BOS would create a conflict of interest, quoting from the organization’s “Best Practice on Audit Committees,” published online.
“No governing body member who exercises managerial responsibilities falling within the scope of the audit should serve on the audit committee,” she read.
Healy argued that the provision applies to Wilton because the BOS is the town’s executive body and oversees the administration responsible for implementing corrective actions that the BOF subcommittee would monitor.
“They make it very clear that the Board of Selectmen is the governing body, and we are the oversight board,” again quoting the GFOA guidance: “‘…to ensure independence and effectiveness, no governing body member who exercised managerial responsibilities falling within the scope of the audit should serve on the audit committee.'”
Healy said including a BOS member would not only throw into question the subcommittee’s institutional independence, but also the appearance of independence before the public.
“The issue is not whether an individual selectman would act objectively,” Healy said. “The issue is whether the committee structure provides the appropriate institutional independence and appearance of independence.”
Healy said excluding selectmen from formal membership would not exclude them from the process.
“We can invite the first selectman to our meetings … We’re going to obviously invite the CFO to come,” Healy said, but the ability for them vote on the subcommittee, she said, would muddy the waters.
“Management implements corrective actions, right?” Healy said. “The Board of Finance oversees whether or not the corrective actions have been implemented effectively. Combining those two roles on the same committee unnecessarily blurs accountability.”
Birch ultimately agreed with how Healy characterized the issue.
“It’s a separation of powers, effectively, is what’s being proposed …” Birch told Escalante. “Now obviously the Board of Selectmen can attend a meeting but they would not have voting authority.”
Escalante Argues for BOS Participation
“My concern is, ‘What are we focused on?'” Escalante said, suggesting that the creation of the subcommittee implied the BOF would be taking over management of the town on some level.
“Where’s the conflict for the BOS to be there?” he said, questioning if excluding selectmen could make it harder to achieve the subcommittee’s goal because it would be the BOS that would have to implement any changes in the end.
“Where’s the conflict for the BOS to be there?” he said, questioning if excluding selectmen could make it harder to achieve the subcommittee’s goal.
Instead, he said he viewed the committee partly as an opportunity for town officials to develop a common understanding of the audit findings and how to address them.
“If we bring the Board of Selectmen in, we all learn together what the issues are, figure out what the solutions are,” he said. “They’re the ones that have to implement the solutions. So if they’re involved in the process, there’s much better chance that the solutions [get] implemented.”
Healy turned that argument around.
“Rudy, you just hit the nail on the head by saying they’re the ones that need to implement it,” she said. “For that reason alone, they can’t be the ones making the recommendations or suggestions.”
BOF member Kari Roberts, likewise, stated her take on the conflict.
“The audit reports that produce these deficiencies have been created because of the procedures that are overseen by the BOS,” Roberts said. “They administer them, so why would they be a part?”
BOF member Eric Fanwick agreed.
“The conflict is inherent in that they are the governing body,” Fanwick said.
Escalante argued that the financial problems identified through the audit process weren’t new, inciting a short disagreement among BOF members over how far back responsibility stretched for issues of material weakness.
“This has been going on for more than one administration,” he said, calling the problems “endemic in the town.”
Healy restated that the subcommittee would initially focus on the four items flagged in last year’s Fiscal Year 2024 audit report, as well as whatever new issues emerge when the Fiscal Year 2025 was finally completed.
Public Calls for Independent Oversight
Two residents spoke in favor of keeping the BOS members off the subcommittee, including former BOF member Sandy Arkell.
“The independent audit committee that you are forming definitely needs to have independence and objectivity,” Arkell said. “That is of the utmost importance.”
Arkell recalled being on the BOF when Boucher sought to downplay material weaknesses identified by the auditor last year.
“I remember sitting in this board and having our first selectwoman saying that it was not a big deal, and I had to basically say, ‘No, this is a big deal,'” Arkell said. “When you have a material weakness in your financial statements, they have to be remediated.”
“Operationally, this is a mess,” she said, “and it has gone on now for three years. We have to fix it.”
Bipartisan Agreement
The BOF also heard from Andrew Warren, a certified public accountant and current chair of the Republican Town Committee.
“There is an important distinction between participating in the process and being a member of the body charged with oversight of that process,” Warren said, noting that BOS and administration input should be welcome, but that they should not actually be members of the committee.
“It is a question of good governance and maintaining a clear and independent oversight structure … In the corporate world, an audit committee works closely with management, but management is not a member of the audit committee,” Warren said. “That separation exists not because management is presumed to have acted improperly, but because effective oversight requires independence from the functions being overseen.”
Warren said separating oversight from management “strengthens independence, transparency, accountability and public confidence in the process.”
Birch said that, based on discussions with the auditors, the audit for Fiscal Year 2025, which is already six weeks late because of extensive management and process issues within Town Hall, should be completed by early September.
He said the auditors reported that there was still a “fair list” of items that had not been completed, including material from the Board of Education, but that they still hope to have a draft of the audit done by the end of August.
