Paul working for you.

Wednesday, July 6, 2016

Does this sound familiar ? Sept 26, 2014


Winchendon selectmen fume over town manager's withholding of audit

DEFICIT IN THE MILLIONS
Winchendon Town Manager James M. Kreidler Jr. in August (T&G Staff File Photo/CHRISTINE PETERSON)
By Paula J. Owen TELEGRAM & GAZETTE STAFF

WINCHENDON — Selectmen want to know why it took weeks before the town manager provided them with an audit that uncovered a deficit in the millions in town accounts. 

The audit was sent to Town Hall and addressed to selectmen from the town's auditing firm, Roselli, Clark & Associates of Woburn. 

C. Jackson Blair, chairman of the Board of Selectmen, said he asked Town Manager James M. Kreidler Jr. many times for a copy of the audit, which was dated July 31. 

Correspondence addressed to selectmen is sent to Mr. Kreidler's office, he said, and is supposed to be placed in each selectman's file. That was not done with the audit, he said. 

The audit, covering fiscal 2013, which ended June 30, 2013, cites several deficiencies, including a lack of ongoing budget monitoring. The auditors are continuing to look into fiscal 2014 and fiscal 2015, which began July 1. 


The state Department of Revenue is reviewing the auditors' work and estimates the town is facing a $3 million to $5 million deficit in this budget cycle. The DOR is still reviewing current fiscal year spending. 

"Adverse operating results in each of 2013 and 2014 have contributed to cause negative free cash, which presently stands at the lowest of all 351 communities in the Commonwealth of Massachusetts," the audit said. 

"While the 2013 and 2014 budgets began in balance, a reduction in revenues combined with the lack of ongoing budget monitoring that resulted in major line item and fund deficits, contributed to this urgent situation. Compounding this issue was the major transition that occurred with the retirement of both the treasurer/collector and town accountant … 

"Without a large general Proposition 2½ override or a liquidation in its reserve balances, the town will have no option but to reduce general governmental services, including public safety, public works, public library and others which will ultimately reduce the quality in the delivery of services," the audit said. 

Mr. Blair said that when he asked Mr. Kreidler to give him a copy of the audit, Mr. Kreidler told him it was "a work in progress." 

Then Mr. Blair said he discovered the audit company had also sent the school superintendent a copy of the audit. School Committee members were given copies, he learned. 

"I went to a restaurant and at least 10 people had it and read it," he said. "The town manager told me, 'It is a work in progress and even though it was addressed to you, it should not go to you until the town accountant and I have looked it over, talked with auditors and then, when we're finished, it is no longer considered a draft, and we'll immediately send it out to the Board of Selectmen.' I was left figuring that is what it is." 

Mr. Blair said that when he thought about it further, the town manager was "always telling me" the Board of Selectmen are responsible for hiring him and the accountant. 

"If I'm supposed to be responsible for him and for her, and they are looking at something that points their errors out, what occurred to me is, I need to see it first before they sort it all out," he said. "I went back a few days later and insisted I be given a copy. He reluctantly gave me a copy with a note on it from the town accountant saying it was irregular, I had no right to have it and it should not be discussed with anyone outside Town Hall walls. That meant that I had it, but the other four selectmen didn't." 

At a meeting Monday night, Selectman Beth Hunt said she also had to push for a copy of the audit, but was told by Mr. Kreidler that it was an internal draft document. She said Mr. Kreidler also deflated the amount of the deficit. 

At the Monday meeting, Mr. Kreidler said he relied on figures provided to him by the previous town accountant, who was mismanaging the town's health insurance trust. He said that unbeknownst to him, for years the accountant was not recording all of the town's health insurance liabilities, which went unnoticed when that account was running in the black. 

However, when several town employees ran into severe health problems, the trust was operating in a deficit that somehow went unnoticed by the town's financial team, including Mr. Kreidler and an independent auditing firm. 

The problem was cumulative, with the deficit carrying over year after year, current Town Accountant Donna Allard said, snowballing to a deficit in the millions. Ms. Allard said auditors uncovered it when she started asking questions and refused to sign off on documents. 

However, some selectmen blamed the town manager and also blamed the auditing firm for not uncovering the issue previously. 

At the Monday meeting, three of the five selectmen who had read the audit asked for Mr. Kreidler's resignation. The other two, who voted against asking him to resign, still did not have a copy of the audit. In Mr. Kreidler's contract is a provision saying he can't be fired without the OK of at least four of the five selectmen. 

Mr. Blair said that when he received a call from Gerard D. Perry from the state Department of Revenue, he insisted the audit and impending deficit — which could cause cuts to the school budget in the hundreds of thousands — be placed on Monday night's agenda. 

"That is the only reason it was on the agenda," Mr. Blair said. "Mr. Perry informed me I better get the information out, it had to be transparent and we needed to let the chips fall where they may. It was put on the agenda against the town manager's wishes because he said he was not ready to address it yet publicly." 

Mr. Blair said it is not the first time Mr. Kreidler has refused to give him a public document. 

"Over time, it has become acceptable practice for them to intercept information and say it is considered draft form and it is not to be given to the people it was addressed to," he said. "Nothing made any sense to me — giving the audit to the people who really were responsible for the bad performance and not selectmen?" 

Contact Paula Owen at powen@telegram.com. Follow her on Twitter @PaulaOwenTG 

1 comment:

The situation described above is a really bad one without any good options. Underfunding the self insured health trust fund has created a structural deficit. Using "one time " money like Free Cash to plug the deficit may address the problem for this fiscal year, but will create a larger problem in the following years.

It takes a long time to build up Free Cash Reserves.

Withholding information from the BOS? How could this be? Withholding information happened here in Templeton on a regular basis. It is not possible to make a good decision based on bad or misleading information.

Let's hope transparency will help out our neighbors in Winchendon. Whatever resolutions are brought forward Winchendon will have difficult decisions ahead as a community.

I hope the state will come in to help Winchendon with guidance and follow through on accountability. I'll still be pushing for the "Investigation" in Templeton, because the four issues in the investigation will help shed some light on Templeton's financial issues. Here you have another community, that "was doing the right things" - yearly audits, accountants, and state reports reviewed by the DOR. A thorough review of the financial safeguards put in place by the state must happen.

3 comments:

  1. So it's anyone's guess about the books in Templeton.
    2013-2014-2015-2016- and beyond!
    Could it be we are in worse shape as we look closer?
    Will we find after all the cuts and limits we are still no better off?
    Demand regular updates from the board who should know?
    What have the previous thought our selectmen have shared done for us?
    See any houses fixed up yet like Selectmen Columbus told us would be?
    See any help or ambition to do a PILOT from the light department?
    See any projects or roads repaired water lines replaced? Wonder why?
    See any movement about contracts from the light department to view at town hall?
    The list goes on and on and it's time we start to call them out for what they should have been doing all along!

    ReplyDelete
  2. It is good to see a strong Advisory Board being assembled once again. These individuals should not be burdened with BS and should be allowed to keep a close eye on the money. The Selectmen are elected and many need to spend town money from where ever they can get it for friends and family to get re-elected. It would be nice to see continuity and a return of the strong Advisory Board with principled members acting towards a sacred trust that somehow has been missing for a while.

    ReplyDelete
    Replies
    1. It is sad that our Selectmen have decided to keep the truth from the people who elected them. What are they going to think when they do finally learn the truth about the financial mess our town is still in, after being told time and time again we would get a A rating. What will they think when they learn what this "new School" is going to cost every one in financing ??? Ms. Haley Brooks and others better think quick, because this mess is on them.

      Delete