Paying More for Less in Bloomfield: Part 3 - The Broken Ledger: Audits, Plugs, and the S&P Downgrade
By Peter C. Frank | Editor-in-Chief
April 21, 2026
(Catch up on the series: Read Part 2 - Administrative Expansion Amidst Public Service Reductions)
BLOOMFIELD — In early April, Bloomfield, CT's Town Manager Alvin D. Schwapp Jr. presented a FY2027 proposed budget that would require a 6.81% tax increase for residents — effectively an 11.6% increase when factoring in the revaluation phase-in. To ostensibly balance this ledger, the administration proposed extreme austerity measures for essential town services: zeroing out the municipal pool, gutting school-year recreation and senior services, halving the prevention crisis fund, and transferring residential trash collection to private pickup.
All of this while simultaneously expanding the budget for executive administration. The community response was immediate and fiercely opposed. Then, upon opening the April 18th Public Hearing, Mayor Anthony Harrington made a sudden, unexpected announcement: all eliminated services, including the municipal pool and trash collection, would be 'restored.' No explanation was provided for exactly how these services would be funded.
A Better Budget for Bloomfield: The Alternative Framework
On Monday evening, just as the Town Council began its budget deliberations, the Bloomfield Community Dispatch delivered a comprehensive, 26-page Alternative Budget Framework directly to all nine councilors via email.
This data-driven roadmap proves that Bloomfield can restore every cut service and lower the tax increase to approximately 4% without utilizing a broken ledger or relying on accounting gimmicks. We are now publishing this framework for the entire community to review.
Download the Complete FY2027 Alternative Budget Framework (PDF)
We invite you to read the document and submit your questions, thoughts, or feedback in the comments section below. We will be actively monitoring this article to answer them.
If the administration is claiming they have suddenly "found" the money to reverse these cuts without raising the mill rate even higher, we must examine where they are looking. The Town Manager's proposed $117.1 million FY2027 budget is built upon a foundational premise: that the historical financial data—the "actuals"—used to project next year's costs are accurate.
A rigorous examination of the town's recently completed Fiscal Year 2024 municipal audit reveals that the underlying ledger used to justify these financial maneuvers is structurally compromised.
The Illusion of the "Clean" Audit
According to a seminal 2019 ISACA (Information Systems Audit and Control Association) publication titled Why Auditors Rarely Find Fraud, the public fundamentally misunderstands the protective value of an external audit.
"One reason auditors rarely find fraud is that audits are not designed to detect and/or prevent a fraud from occurring," the ISACA report warns. "They are not aimed at detecting and remediating a fraudulent occurrence."
External auditors do not conduct forensic criminal investigations; they rely on statistical sampling, assuming the town's internal controls are functioning. But in Bloomfield, those internal controls completely collapsed. The FY2024 audit cited two "Material Weaknesses" (the highest level of severity in auditing).
Internal correspondence with the State Office of Policy and Management (OPM) obtained via a Freedom of Information Act request exposed the severity of this breakdown. In a December 8, 2025, letter (page 8), the Finance Director formally admitted to the State that "more than 50% of the day-to-day work that should have been completed during FY2024 had not been completed." He confirmed that the Finance Department bypassed the official MUNIS accounting software for approximately half of the town's financial activity and that bank reconciliations for the town's primary transactional accounts were "backlogged for 15 months."
When internal controls fail this spectacularly, an audit provides no guarantee of financial integrity. As ISACA notes in its report, "An intrinsic limitation of sampling is that all transactions are not tested, therefore creating a high probability that a fraudulent transaction will not be captured... and will go undetected."
The 16-Year "Plug"
To finally pass this delayed audit and force the broken ledger to balance, the town resorted to a massive accounting maneuver: a "plug" that wiped out 16 years of irreconcilable legacy variances.
In the same December 2025 letter to the State OPM, the administration explicitly admitted that they "researched accounts that had historical, unchanged balances going back as far as FY2008, and made adjustments to eliminate these legacy issues."
In other words, the external auditors did not certify that Bloomfield's historical financial data was accurate; they merely confirmed that after retroactively altering 16 years of financial records, the spreadsheets finally balanced well enough to close the books.
The S&P Downgrade: The Real Cost of Administrative Failure
This multi-year failure to maintain basic accounting standards did not go unnoticed by Wall Street.
During the budget presentation, local officials attempted to downplay the town's credit situation, with the Mayor incorrectly stating that the town's rating had been "reaffirmed." This is factually inaccurate.
The verifiable reality is that due directly to delayed audits and what analysts called "weaker management," S&P Global Ratings permanently downgraded the Town of Bloomfield's General Obligation debt rating from its premier 'AA+' status to 'AA'. While S&P recently affirmed the new 'AA' rating—only because the town finally submitted the 2024 audit at the absolute eleventh hour—the downgrade itself stands.
In written correspondence with the Bloomfield Community Dispatch, Charlene Butterfield, Managing Director at S&P Global, explicitly confirmed the agency's exact rationale. "As stated in the report, given the town's inability to complete timely financial reporting, we view the town's governance risk, specifically related to its transparency and reporting, as elevated," Butterfield stated.
When pressed by the Dispatch on how S&P could trust a ledger reliant on a 16-year retroactive "plug," the agency offered a standard corporate deferral. They stated they analyzed the audited financial statements "under the framework of our criteria" and through discussions with management, rather than defending the granular integrity of the town's day-to-day accounting.
Perhaps most alarmingly, S&P has established a new, lowered bar for Bloomfield's future compliance. Butterfield confirmed that the agency's "Stable" outlook for the downgraded 'AA' rating is predicated on the town submitting its FY2025 audit by July 2026. This timeline guarantees the FY2025 audit will be officially delinquent and in violation of state statutory deadlines upon filing, yet S&P will accept this chronic delinquency as the town's new standard operating procedure. "If the FY25 audit is provided within the timeframe management indicates, we will be able to maintain our rating," Butterfield noted.
This downgrade translates to higher future borrowing costs for the taxpayer. The administration's failure to maintain a basic general ledger actively cost Bloomfield its premier credit status. Taxpayers cannot be asked to fund a 6.81% tax hike using historical data generated by a department that failed to reconcile its own checkbook for over a year.
Restoring that premier credit status — and the lower borrowing costs that come with it — requires more than simply submitting future audits on time. S&P has made clear that it is watching Bloomfield's long-term liability management. That means the town must also confront the structural obligations that rating agencies weigh alongside audit timeliness: most urgently, its $76.3 million net Other Post-Employment Benefits liability.
The Structural Solution: Fixing the OPEB Liability
The Town Council must mandate structural fiscal reform before asking taxpayers for another dime. To rapidly restore the lost 'AA+' credit rating and free up operating capital to save services like the municipal pool, the administration must address its $76.3 million net Other Post-Employment Benefits (OPEB) liability.
Currently, the town's OPEB trust is only 22.34% funded — a figure confirmed by the FY2024 audited financial statements. Rather than simply throwing more taxpayer money at the deficit, the town can execute an innovative structural shift: The Medicare Advantage Conversion.
By transitioning eligible municipal retirees (age 65+) from the town's expensive self-insured group health plan to a municipal Medicare Advantage group plan (an Employer Group Waiver Plan, or EGWP), the federal government effectively subsidizes the benefit. Municipalities across the country — including several in the Northeast — have executed this transition, maintaining equivalent or superior coverage for their retirees while seeing per-retiree cost reductions of 40% to 60%. The federal subsidy structure holds regardless of local plan design, making this a broadly applicable solution for towns with significant retiree health obligations.
For Bloomfield, a 40% reduction in the OPEB liability would instantly shave roughly $30 million off the town's books. This permanently bends the town's long-term cost trajectory downward, satisfies the credit rating agencies' demands for stronger financial management, and preserves the capital needed to fund the core community services our residents rely on today.
Check back soon for the next part in our continuing series: Part 4: The Legal Overrun: Taxpayer-Funded Appeals, where we review the Town Attorney's 127% budget overrun and propose mandating competitive rebidding to save hundreds of thousands in "undefined" billing.
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