Rumor has it that since I was ejected from the BoS meeting on the 13th of September I got my mind right and stopped leaking public information to the public. No such luck! It’s been awhile since the last post because I’ve been trying to let the wheels of justice grind. As you know those wheels grind exceedingly slow. The BoS have been fielding a flurry of open meeting law complaints including one complaint that rises to the level of a civil rights violation. There have also been a few audits going on; one of which is the subject of this post.
If you attended the Finance committee meeting last Wednesday, and I know you didn’t, you would have been treated to a rough draft of the 2012 management letter drafted by the towns auditing firm Scanlon & Associates, (S&A). S&A took a hard look at the numbers, policies and procedures and found that the town needs to step up its game in regard to financial accountability. As you will see in the management letter, which was attached to the email, the water company is not the only department that needs to be more transparent in the reporting of the numbers. Here are just a few of the comments that S&A, an independent auditing firm, made in the draft of the management letter to the town.
1. 2012-1 Tax Collector Accounts Receivable Reconciliations (Significant Deficiency)
2. 2012-2 Water Accounts Receivable Reconciliations (Significant Deficiency)
3. We recommend that the Town Accountant and Treasurer improve the cash and investment reconciliation process by documenting and properly identifying all reconciling items
I’m not going to go into the details of the management letter, as you can read it for yourself in the pdf attached to the email or embedded in the post. I’m sure with all of the financially savvy people reading this there will be plenty of discussion on the implications of the management letter. I’m not going to speculate as to why after years of upbeat management letters filtered through rose colored glasses we are suddenly receiving such a scathing review. One FC member suggested that it was probably because someone finally lit a fire under their ass. I guess with the constant scrutiny from the FC and some unruly vocal citizens a rosy review would not have been credible.
I will however go into the general discussion that went on at the FC meeting. All members of the FC were horrified with what they read in the report. Someone asked if management letters drafted by our previous auditing firm were as harsh as the S&A letter, but no one could remember any of the past letters being so candid. I have to wonder if Hirbour & Haynes P. C. ever noticed these things; or warned the town that these things may be going on? Perhaps these discrepancies occurred only since this new set of eyes took a look at the books. I guess we have to keep a better set of eyes on the town finances. You can do that by coming to the BoS and FC meetings. This next meeting will be important because this audit report is on the agenda. So come on out to the meeting, you may be surprised. These meetings are actually kind of fun, especially when you’re being dragged out by three Police officers.
On Monday November 4, 2013 at 7:00 pm. Tom Scanlon, of Scanlon & Associates, is scheduled to be at the BoS meeting. I don’t know if Bruce is going to allow the citizens to ask questions of Mr. Scanlon; but just in case he does, read the report and have your questions ready. Since our town government works best when more citizens participate, I would like to see so many people show up for the meeting that we have to move to the firehouse. Just to pique your interest let me share a few more tidbits from the report.
1. During our audit we found that effective procedures were not in place to reconcile the Tax Collector's accounts receivable subsidiary records to the general ledger.
2. During our audit we found the water accounts receivable subsidiary records were not being effectively reconciled to the general ledger. Variances exists between the water accounts receivable subsidiary records and the general ledger as outlined below:
3. We recommend that the Town Accountant and Treasurer improve the cash and investment reconciliation process by documenting and properly identifying all reconciling items.
4. During our audit we noted that payroll withholding account balances are not being properly reconciled. Because these accounts have essential annual activity and carry with them statutory tax liabilities, among other responsibilities, we recommend that these accounts be accounted for accurately and consistently.
KevinZurrin Scanlon and Associates Audit Report