The City of Ithaca hired accounting firm The Bonadio Group to repair and maintain its internal financial records to move forward with overdue financial audits for 2022 through 2025.
Acting City Manager Dominick Recckio provided the update to the Ithaca Common Council during its Jan. 21 meeting. He said the Bonadio Group will assist city staff with financial records reporting and internal systems.
“They have already begun comprehensive and effective meetings with our controller’s office staff to get the information that they need in order to begin their work pulling that information together and to set us on the right path as it relates to our reporting,” Recckio said.
After completing its 2021 financial audit in September 2025, city officials seek to fully address the backlog of outstanding audits. Moody’s Investors Service revoked Ithaca’s bond rating in April 2024 due to a “lack of sufficient information” related to the backlog. Low bond ratings signal poor creditworthiness, forcing a municipality to face higher borrowing costs and potential financial instability that make funding major public projects more difficult and expensive.
When the 2021 audit was completed, then-City Manager Deb Mohlenhoff cited pandemic-related staffing shortages and complex American Rescue Plan Act (ARPA) funding reporting requirements as reasons for the backlog.
In a Jan. 16 memorandum to the Common Council, Recckio said “existing financial records and internal financial systems must be corrected and properly maintained.” Recckio will meet with the Bonadio Group project leaders at least once a month to review progress reports and provide oversight.
“The Bonadio Group was originally contracted by the City to perform audits,” according to the memorandum. “Upon commencement of that contracted work, deficiencies in the City’s severely outdated financial reporting and records systems were identified, several of which resulted from new financial reporting standards going into effect in 2022 and subsequent years. These deficiencies prevented an accurate audit from being performed. The City has amended its contract with Bonadio to perform a multi-phase financial consulting project that will result in more complete, transparent and accurate financial records.”
Recckio said the city is initially funding the project with resources previously allocated for the Bonadio Group”s consulting services. He said the firm cannot audit its own work, so it will help the city recruit an independent auditor once the financial records are corrected.
“Once the requisite financial cleanup and reporting work is complete, the City will proceed with conducting audits for 2022, 2023, 2024, and 2025 in rapid succession as resources allow,” the memo says.
Recckio said the city was further delayed with its 2022 audit by new Governmental Accounting Standards Board (GASB) requirements on reporting procedures for assets such as leases and software.
GASB is an independent, private-sector organization that sets accounting and financial reporting standards for state and local governments, according to its website. Its standards seek to “promote financial reporting that provides useful information to taxpayers, public officials, investors, and others who use financial reports.”
Recckio said the Bonadio Group will consult with city officials on better usage of the MUNIS software to improve its financial reporting system. He said the firm has not yet established a formal timeline for the financial reviews, but the city seeks to be audit ready as quickly and accurately as possible.
Mayor Robert Cantelmo said he was pleased to see decisive action to remedy the problem in a transparent manner.
“I do think that this is a strong step in the direction that we need to be heading to address these issues,” Cantelmo said.
During his2026 State of the City Address on Jan. 14, Cantelmo said completing the outstanding audits is the city’s “top operational priority.”
Recckio said he will share further updates with residents and the council as more details become available in February.
Philip O’Dell is a news reporter for the Ithaca Times and Finger Lakes Community Newspapers, covering various topics that include local government and crime. Reach him via email at philip@ithacatimes.com.
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