Winchendon selectmen fume over town manager's withholding of audit
DEFICIT IN THE MILLIONS
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| 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
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.
ReplyDeleteIt 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.
So when will the good people of Templeton know the "Eye-popping" deficit in Free cash for FY 13?
ReplyDeleteRound and round we go!
Where this stops, no body knows. This is not a cute situation for the Town to be in. The Town being in a hole will not stop until we learn to live with in our means. Selectmen that think they know it all, but really don't have a clue' have to learn to listen. Continued reckless behavior has to stop. Will it ? If not the next election is in May. It is important the public be informed, you know that trust and open communication they keep spouting !! So when will the people be told the news ?? Maybe when 14 and 15 are done.
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