Audit of the Southfield Redevelopment Authority
March 29, 2018 · Southfield Redevelopment Authority · Read the full official report on mass.gov ↗
Published March 29, 2018 Audit covers July 1, 2014 – December 31, 2016 Under Suzanne M. Bump · 2011–2023
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“However, SRA still needs to improve in certain areas.”
Read the plain-English breakdown
This is a Massachusetts State Auditor performance audit of the Southfield Redevelopment Authority, which oversees redevelopment of the former South Weymouth naval air station.
“I am pleased to provide this performance audit of the Southfield Redevelopment Authority.”
If SRA cannot cover its debts and future costs, the redevelopment project could suffer serious financial problems and slow or fail.
“Not effectively planning for these financial needs could cause SRA to experience significant financial hardship, which could impede its ability to accomplish its mission to redevelop the former South Weymouth naval air station (NAS).”
For residents and taxpayers, this matters because the project involves local land use, taxes, services, housing, commercial development, and long-term obligations affecting Abington, Rockland, and Weymouth.
“The new law granted the towns greater control, particularly regarding land use decisions, collection of taxes, and provision of municipal services within the South Weymouth NAS.”
The auditor’s main message was that SRA should plan now for possible liabilities and future cash needs, instead of assuming money will be available later.
“SRA should immediately develop plans and take the measures necessary to ensure that it can fund its contingent liabilities should they occur, in addition to making sure its future cash flow needs will be fully met.”
SRA said it planned to pursue changes to limit its exposure on the Navy note and seek a legal change to make its audit filing deadline realistic.
“We intend to seek an amendment to our enabling statute to reflect this reality so that we can avoid a recurring audit finding.”
The report is significant because SRA oversees a large redevelopment that could include thousands of homes and major commercial space, and the authority is scheduled to eventually disappear or hand powers back to the towns.
“Chapter 291 requires that, in any event, the duties and powers assigned to SRA revert to the Towns of Abington, Rockland, and Weymouth by December 31, 2065.”
A contingent liability means a possible bill that may become real later, depending on what happens.
“A contingent liability is a potential liability that may become an actual liability depending on the outcome of a future event.”
4 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Has SRA taken the appropriate corrective actions on audit findings and recommendations from the prior audit report in the following areas: improving its board of directors’ oversight of agency management?
- Complied Has SRA taken the appropriate corrective actions on audit findings and recommendations from the prior audit report in the following areas: improving internal controls over the procurement of services?
- Did not comply Has SRA taken the appropriate corrective actions on audit findings and recommendations from the prior audit report in the following areas: publishing and filing its annual financial audit as required by Section 31 of Chapter 291 of the Acts of 2014?
- Did not comply Has SRA taken the appropriate steps to ensure its financial solvency?
What the Auditor found
Why it matters: SRA could experience significant financial hardship that could impede its ability to redevelop the former South Weymouth naval air station.
Standard: Sound business practice and Governmental Accounting Standards Board Statement No. 56 require planning for contingent liabilities and going-concern risks. ( Governmental Accounting Standards Board Statement No. 56; Section 6(s) of Chapter 291 of the Acts of 2014 )
1 recommendation
- SRA should develop plans and take measures to ensure it can fund contingent liabilities and future cash-flow needs.agency: partially agreed
Agency response & Auditor reply
Agency: "With the Second Amendment to the PSA now fully executed, we intend to request that the Note be further amended to show that the Authority’s financial exposure is limited to the value of the remaining real estate and convert the Note to a non-recourse obligation."
Auditor: "Although we encourage SRA to pursue the revised amendments providing for a non-recourse note,8 until these amendments actually occur, the Authority’s contingent liability remains."
Why it matters: Key information about SRA’s financial state was not made available to stakeholders in a timely manner.
Standard: Section 31 of Chapter 291 of the Acts of 2014 requires SRA to file its annual audit with the state auditor within 120 days after the end of the fiscal year. ( Section 31 of Chapter 291 of the Acts of 2014 )
1 recommendation
- SRA management should send annual financial audits to OSA within 120 days of fiscal year close, or seek legislation amending the timeframe.agency: agreed
Agency response & Auditor reply
Agency: "We intend to seek an amendment to our enabling statute to reflect this reality so that we can avoid a recurring audit finding."
Auditor: "We agree that SRA should seek legislative relief to enable it to comply with filing requirements."
Prior findings revisited
"During our current audit, we found that SRA, in response to our prior audit’s recommendations, had developed plans for completing the East-West Parkway, providing and financing a water and wastewater system, and financing future infrastructure requirements; effected better oversight by its board; and improved its internal controls over the procurement of services."
"Our prior audit (No. 2012-1452-3A) had also found that SRA did not file its annual audit report for fiscal year 2011 with OSA within the required timeframe."
More audits of this entity
Other Office of the State Auditor reports on Southfield Redevelopment Authority , including the prior audits referenced above.
- Audit of the Southfield Redevelopment Authority (December 20, 2024)Authority / Commission · December 20, 2024