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Friday, September 5, 2014

Worcester district attorney probes Hubbardston tax glitches

Worcester district attorney probes Hubbardston tax glitches

By Paula J. Owen TELEGRAM & GAZETTE STAFF

HUBBARDSTON — Worcester District Attorney Joseph D. Early Jr.'s office is investigating irregularities in the former tax collector's records that were discovered by independent auditors, Town Administrator Anita M. Scheipers said.

Town officials previously would not disclose why former Tax Collector Cynthia Washburn-Doane resigned at the end of May after 25 years at the post. A recent public-records request by the Telegram & Gazette for a copy of her resignation letter to Ms. Scheipers was denied, but Ms. Scheipers said this week that Ms. Washburn-Doane's agreed-upon resignation came after auditors from Scanlon & Associates of South Deerfield noticed the town's tax collection rates were much lower than they should have been.

The firm completed the audit for fiscal 2012, but is still conducting audits for fiscal 2013 and 2014, she said.

A request to Scanlon for comment was not returned.

"They noticed there was a trend in the tax-collection rates," Ms. Scheipers said. "They were much lower than they should be. Most communities have a 98 percent collection rate and 2 percent receivables due. The town rate was much lower."


In fiscal 2012, Hubbardston's total real estate tax commitment was $4,854,434, but the tax collection rate was only 90 percent, Ms. Scheipers said — about $4,369,000 was recorded in real estate tax collections for that year. In fiscal 2013, she said the total commitment was $5,396,835, but the tax collection rate dropped to 87 percent, with about $4,695,246 recorded in collections that year.

Tax collectors and finance directors in several Worcester County communities, including Sturbridge, Ashburnham, Ashby and Rutland, said their yearly tax collection rates average from 97 percent to nearly 99 percent.

"FY2012 was low and then having FY2013 drop below 90 percent was a red flag for the auditors," Ms. Scheipers said.
She said she did not have data for fiscal 2014.

A spokesman for the state Department of Revenue said the agency will work with the town to help set the tax rate by the end of December as required by law if needed.

Part of the problem is that the town recently went through three town administrators, including an interim, and annual audits were not completed the past three years as is required by the town for all town departments, Ms. Scheipers said. She took the post in May 2013.

"Once we went through our portion of the investigation, we referred it to the DA's office," she said.

Spokesman Timothy J. Connolly confirmed Mr. Early's office is investigating but would not comment further.

When the Telegram & Gazette questioned Ms. Washburn-Doane at her home this week, she referred all questions to her attorney.

"I am not going to talk about it and that is the end of it," she said outside her Hubbardston home Wednesday.

"It is a difficult and compelling situation and we're going to have to address it in the court system," her attorney, John M. Dombrowski of Leominster, said.

Ms. Washburn-Doane was replaced by Town Treasurer Kristen J. Noel, who is serving as acting tax collector.

Ms. Scheipers said the town is considering combining the two positions.
Contact Paula Owen at powen@telegram.com. Follow her on Twitter @PaulaOwenTG.

1 comment:

  1. I'm glad the DOR is looking at collection rates now and didn't disregard the low collection rates as a "local issue".

    Maybe if Templeton's requests for help had not been disregarded; had not been written off as a 'local issue", we wouldn't have as many financial issues.

    On the bright side Templeton will have an audit for FY 13. The town administrator has signed the engagement agreement to have this important work done.

    The BOS will be looking for some money to conduct an FY 14 audit. During the budget process for FY 15, we could only afford to do one audit. The auditors recommended not to skip a year.

    Performing these audits is the first step in trying to obtain a bond rating for the town. The audits as well as looking at Tallage for recovering money from back taxes should go a long way to helping the town recover financially. Combining Tax collector and Treasurer is another step in the right direction, in my opinion.

    So far Barre, Hubbardston and Templeton have had issues with their finances. The traditional safeguards put in place seem to have failed many small towns.

    In the past, Templeton had audits on a regular basis. We had a CPA as an accountant. All of our financials were "blessed' by the DOR and yet we still have problems. No red flags were raised by the continual use of free cash and stabilization money to support the increasing operating budget...except by a few.. and those few were demonized.

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