Biddeford Mayor Marty Grohman and members of the Biddeford City Council received a blistering report Tuesday from the city’s independent financial auditor, Runyon, Kersteen and Ouellette (RKO).

Although Tuesday’s audit presentation focused on the FY 2023 audit — overdue for more than two years — it also painted a troubling picture about how the city’s finances have been handled during the last two years.

Sarah Dodge – an accountant at RKO – told the council that she found “several serious deficiencies” in how the city handled its finances, including an absence of cash reconciliations and mismanagement of federal grant money that was awarded to the city.

Dodge stressed that RKO found no evidence of fraudulent activity at City Hall.

Still, it was clear to those in the audience that many members of the council seemed troubled by the presentation.

Dodge made several recommendations to the council, saying the city should hire a grant manager.

In an interview with the Biddeford Gazette, Grohman said he knows that residents are frustrated by the continued news of financial management issues at the City Hall.

Grohman said that he and the council are also frustrated about the situation, but are also “fully committed to turning things around.”

“Completing the FY23 audit is an important milestone, and it shows that the investments we’ve made in stronger oversight are starting to pay off,” Grohman said. “Presenting the audit to the public in a full council meeting is part of the open book approach we are committed to.”

“What we’re facing is a need for better systems, tighter controls, and more timely reporting—and we’re making those changes,” Grohman added.

“What RKO presented this week
confirmed the depth and duration
of the city’s breakdown in basic
financial oversight.”

— Council President Liam LaFountain

Grohman said that the city has already implemented a new sewer billing program, and that payroll software upgrades are next.  “All of these steps will bring more accuracy and predictability for both residents and employees,” he said.

Grohman also pointed out that the city’s “rainy day fund,” known as the “Fund Balance” remains healthy and strong.

“This turnaround won’t happen overnight, but it is happening,” Grohman said, pointing out that Gerry Matherne, the city’s new finance director, has been making tremendous progress in getting the city’s financial controls back on track.

City Council President Liam LaFountain chairs the city’s Finance Committee.

LaFountain agrees with Grohman, saying the city is working hard to address financial deficiencies.

“There is absolutely no excuse for what Biddeford’s FY23 audit report revealed,” LaFountain said. “What RKO presented this week confirmed the depth and duration of the city’s breakdown in basic financial oversight.”

LaFountain said the absence of timely reconciliations, delays in reporting, and failure to manage cash controls and grant compliance should never occur in any city, let alone persist across multiple fiscal years.

“The point is that it happened, and Biddeford residents and taxpayers deserve direct acknowledgment of that,” LaFountain said. “There is no sugarcoating it. The audit report is an embarrassing document, but it also serves as a valuable tool. It gives the city a roadmap. It shows us clearly what went wrong and what must be fixed.”

“Responsible public stewardship is not optional,” LaFountain added. “Without it, the risk of further financial damage is real.”

RKO’s entire summary report to the council can be viewed or downloaded below:

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Randy Seaver is the editor and founder of the Biddeford Gazette. He may be contacted by email: randy@randyseaver.com

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