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Clarksburg Making Headway on Accounting Procedures

By Tammy Daniels
iBerkshires Staff
04:07PM / Thursday, December 05, 2013
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CLARKSBURG, Mass. — The town has made significant progress in resolving serious financial and procedural issues pointed out in a management letter from the state Department of Revenue.

With those issues being corrected, it was decided that the Finance Committee will take the lead in developing next year's budget in cooperation with the Selectmen.

The committee received an update on the progress from Town Administrator Thomas Webb and Selectmen Chairman Carl McKinney on Tuesday evening. Also attending to answer questions were Town Accountant Christa Marsh and Treasurer/Collector Melissa McGovern.

The town's financial books have been in disarray for at least several years, causing this year's town meeting to be delayed because officials were not sure how much money the town had. Officials have been working with recommendations that date back to a 2010 audit by Adelson & Paige, a review this year by Scanlon & Associates, the state recommendations and a technical review.

The greatest concern has been over the reconciling of the town's revenues against its payments and bank statements. The problem was noted by the DOR in its report that "Apparently this is a long-standing circumstance as, by mutual agreement, cash balance variances in the past were routinely allowed to remain unresolved, even while reporting otherwise to DOR."

The discrepancies have remained but have not changed in nearly six months, which officials said indicated that new procedures were working.

"We've been a $113,000 off since June," said Webb. "But we're remaining off the same amount each month." McKinney added that "as long as that number stays the same we're doing good."

"That's not good we're that far off but it's good we can make the progress to keep it the same for so many months," Finance Committee Chairman Mark Denault agreed.

Webb also reported that onsite training had occurred for use of the new SoftRight accounting software and that remote help was continuing to be available; the treasurer and account were reconciling accounts regularly; a cash book was being maintained, and the town's data and email systems had been secured through passwords and backups and critical paperwork was being locked up, among other items.

A Written Information Security Plan (including a designating a security officer) and fraud policy were being developed. Webb said he had been researching requirements for such policies and was working on a fraud policy based on those used by other communities.

DOR: Financial Management Review

Scanlon: Agreed-Upon-Procedures

It is also being recommended the town identify future costs in a separate line item. The Governmental Accounting Standards Board, or GASB, accounting includes such costs as pensions and insurance for retired workers. McKinney said the budget line item would have to be voted on at town meeting.

The town also needs to codify its bylaws dating back to 1937 and is requesting aid from the attorney general's office in doing so because they have not all been properly recorded, including whether they were approved by the Legislature.

"I talked to the woman who was trying to put together information on our bylaws from 1937," said Webb. "Right now, I'm really looking for a price on copying all that stuff so we know what we have for bylaws and what we don't."

Webb said the town will also have to hire a company to sort through more than 30 years of documents now being stored in the furnace room. He and McGovern had moved the material to at least get it off the floor but there's a tremendous amount to go through.

"That's a big project and it will take some full-time effort by another company to do it for us," he said.

Looking forward, officials agreed it was time to put a recommended capital plan in place.

"We should look at our capital needs for the next one, three, five, 10 years," said McKinney. "My degree in finance says you should be financing your capital project.

"We only used our free cash for repairs and capital improvement ... It doesn't work and it's inconsistent."

Denault said department heads need to be planning ahead instead of putting capital needs into annual budgets.

"Your budget shouldn't be affected because you need a truck this year," he said, adding, "I think without planning on the capital expenses we've bound our own hands."


Tags: accounting,   Finance Committee,   municipal finances,   

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