Problems with the town audit
Published on March 6th, 2002
STONEHAM, MA–Auditors have found problems in Stoneham’s books for the past three years. This week town officials will meet to develop solutions.
“There is no sense that there has been any misbehavior,” said Town Administrator David Berry. “We just need to figure out who should do what and when.”
The certified public accounting firm of Melanson, Heath & Company identified eight issues in the audit of fiscal 2000: receivable records were not reconciled, efficiency and controls in the Treasurer’s Office were not up to par, School Department vendor disbursements weren’t properly monitored, Fire Department details were paid out of vendor records instead of regular payroll, income interest was not being accurately recorded and the Town hadn’t begun to change procedures to meet new accounting guidelines taking effect in fiscal 2003.
In an interview last Friday, Berry said most of these problems remain unsolved. He will meet with Selectman Tony Kennedy and a sub-committee of the Finance Board chaired by member Barbara MacLeod sometime this week. They plan to discuss how to implement the changes recommended by Heath and how to keep a closer eye on the books. More training for employees, a free Depart-ment of Revenue audit and an in depth, paid management study are ideas on the table, Berry said.
“There has been a lot of turn over in the the last few years,” Berry said.
Last year a computer expert left Town Treasurer Tom Cicatelli’s office before other staffers could be fully trained on the complicated MUNIS system. Cicatelli has missed weeks this year on medical leave. Town Accountant Ron Florino had to leave his post this past spring to act as Town Administrator until Berry came aboard.
The town hasn’t broken any laws, according to the audits. Audits are only required every three years, although most towns audit their books annually. And the only point Heath called a “reportable condition” and “material weakness” was the unreconciled receivable records. (Material weaknesses are defined as procedures which may result in mistakes being made and not caught, and the firm must make public reportable conditions under the rules of the American Institute of Certified Public Accoun-tants.)
“A bad report could affect our overall credit rating for borrowing,” Berry said.
Cleaning up the Stoneham books may cost money, but taxpayers will benefit from a swift action, Berry said.
“It behooves us to do this now because we could save hundreds of thousands in borrowing,” Berry estimated.
Berry said a quick response is needed because of the cumulative nature of accounting errors and added that he’d like to handle the problem as soon as possible to remove any perception of impropriety.
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