City of Richmond’s credit rating could be in danger

RICHMOND, Va. (WRIC) — The City of Richmond’s 2014 Annual Financial Report is five months late. That means city council members don’t really know how much money they’re working with.

It also threatens the city’s credit rating — which is currently pretty good. Every year, the Finance Department at Richmond City hall is responsible for compiling what is known as a Comprehensive Annual Financial Report or CAFR. It is essentially a complete financial report of the city.

It’s due each year by December 31. However, the City of Richmond still has yet to submit theirs for 2014… meaning the city’s bond rating could take a hit from AA+ to AA according to the Richmond City auditor. If that happens, it could cost the city more to borrow money.

“It is a legitimate concern,” said Richmond City Auditor, Umesh Dalal.

Not having a report also means City Council has a harder time creating their budget. We went right to the man responsible for finishing the report.

“I can’t say I’m not concerned because there is a ways to go, but we are near the finish line,” said Norm Butts, Deputy Chief Administrative Officer for Finance and Administration.

Butts says the first draft should be completed in the next couple of days, he said the delay is due in part to a new accounting system put into operation last year.

The city auditor says while the delays are serious, he doesn’t blame the current team, he says others before them got this to the point it is today.

“Obviously we want to get this down sooner rather than later, it’s gone on too long,” said Butts.

Once the report is complete it still has to be audited by an independent auditor. Only problem is the auditing company who the city has hired at a cost of around a quarter million dollars, says once they finally audit the 2014 report they quit citing a dysfunctional working environment here in Richmond.

No further details about why they quit were available.

“Because we got an external auditor that declined to renew the contract, may be a concern for the bond rating company,” said Dalal.

Stay with 8News for more information on this developing story. We’ll keep you posted on updates.

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