Firm criticizes town’s oversight of cash from departments

State auditors expected this week in N. Hartford

By ELIZABETH COOPER

Observer-Dispatch

Posted Nov 18, 2009 @ 07:42 PM

Last update Nov 18, 2009 @ 07:51 PM

NEW HARTFORD —

The local firm that audited New Hartford’s 2008 books has issued a letter outlining what it calls deficiencies in the way the town handles its funds.

Topping the list from Barone, Howard & Co. public accountants is the fact that the town accounting department “performs no oversight of the cash receipt process” for revenue that comes from various departments.

Instead, the highway, parks and recreation and codes departments, as well as the Senior Nutrition Center, each use their own systems to track the funds they take in.

The amount of revenue generated by those departments is about $530,000, according to figures provided by town Budget Director Heather Mowat.

“We identified certain deficiencies in internal control that we consider to be significant deficiencies and other deficiencies we consider to be material weaknesses,” the letter said.

Town Supervisor Earle Reed said Mowat was working with staffers from those departments to put systems in place for tracking departmental revenue.

“We’re on top of that,” Reed said. “We have a state audit coming, so we better have all of our ducks in a row.”

Auditors from the state Comptroller’s office are expected in New Hartford this week, in the wake of numerous revelations of mismanagement of town funds.

Since 2006, New Hartford's main rainy-day fund has dropped from $2.8 million, and officials have projected there will be just $150,000 left in the fund by the end of the year.

Additionally, about $3.3 million in money paid by developers to mitigate the impacts of their projects on the town has sat unused.

Departments defend practices

The officials that lead the departments in question said they were confident their existing systems were adequate.

“It’s worked for years here,” Senior Center Director Eileen Spellman said. “We have been doing it long enough, and there are no problems with it.”

Parks and Recreation Director Mike Jeffery said he had a careful internal bookkeeping system he believed prevented mistakes.

“Everyone sees that and thinks there is some sort of thievery going on,” he said of the letter. “It’s really just about communication.”

Highway Superintendent Richard Sherman and Codes Director Joseph Booth said they had systems in place as well.

Mowat said she had not found any evidence of wrongdoing, and the auditors were pushing for a clear set of policies to better monitor the funds.

“This is about documenting a process so that every department communicates with the accounting staff, and it ensures the proper recording and protection of revenues,” she said.

John Howard of Barone, Howard & Co. said he was unaware of any misconduct.

“They have no controllership there,” he said. “There has been no assessment in the longest of time of how those departments are handling their funds.”