Better bookkeeping earned the city passing marks in the most recent audit by state officials.

It was a signficant improvement over the previous review, when auditors found the books in such disarray that they simply abandoned the audit.

“The city has shown commitment to resolve issues identified in the prior year’s audit,” state officials wrote in an “Accountability Audit Report” covering city operations for January-December 2001, which was released last Friday. “(The city) made several internal control improvements, and implement several recommendations in a short period of time.”

The biggest accomplishment might have been submitting the required documents on time – only the third time the finance department has managed to do so in 21 years, dating back to city of Winslow days.

Mayor Darlene Kordonowy – who had called the previous audit results “just horrible” – expressed satisfaction with the latest report.

“I’m confident that they’ve been making some changes in the finance department,” Kordonowy said. “This last audit got all our attention – all of us.”

In a review of city operations for a two-year period, 1999-2000, that was released over the summer, state auditors found that dozens of checks could not be accounted for, billing records for local improvement districts were in disarray and standards for safe cash-handling were violated.

While auditors found no evidence of fraud or other improprieties, they concluded at that time that the accuracy of the books could not be vouched for.

The new audit concluded that city had generally corrected those problems, although at least one new one surfaced.

In a companion document, a “Report on Financial Statements and Federal Single Audit” released Sept. 30, the auditor said the city had “weak controls over grant administration.”

The auditor said that more than $221,000 in federal money – grant funds owed to city to as reimbursement for the recent High School Road reconstruction – had gone unclaimed.

Other grant funds that were to cover a study of island shoreline conditions had also gone unclaimed, the auditor said.

City administrator Lynn Nordby said that the public works department was feeling its way through grant administration process, handling paperwork that is usually completed by the state.

All of the federal funds to which the city was entitled for the High School Road project have been received, he said.

Grant funds for the nearshore inventory, Nordby said, had gone unclaimed at the time of the audit because the costs of the study itself were in dispute – city officials felt they had been overcharged by the consultant doing thet work.