'Not good,' says auditor
Story by Dan Hust
MONTICELLO May 17, 2013 Still without a permanent, full-time manager or treasurer, Monticello’s village board was warned last week by its auditor that the village is not in great fiscal shape.
“At the end of the day,” auditor Ed Musa of the Gitlin and Associates CPA firm told trustees, “the picture’s not so good.”
He was presenting the village’s 2011 audit (covering August 1, 2010-July 31, 2011) to the board last Tuesday, but he agreed with Trustee Carmen Rue that the problems may be worse when the 2012 audit is completed.
“The recordkeeping is not being done properly,” Musa told the board so much so that his firm is hesitant to undertake the already-late 2012 audit, with Musa indicating the $25,000 the board approved to pay the company for the 2011 audit may not fully cover their investment of time and effort.
“Both my partners are saying we shouldn’t do it,” he said of the 2012 audit. “… I would suggest you go out to bid.”
In the meantime, the NYS Comptroller’s Office, which is conducting its own audit of the village, is demanding a 2012 audit be provided soon, said Trustee Rue.
‘A sinking ship’
According to the 2011 audit letter, the village didn’t follow its own policy of getting at least three written bids on projects over $3,000 (on at least 10 of 25 audited bid projects, said Musa), didn’t timely reconcile cash accounts (sometimes for more than six months) and property taxes receivable, didn’t properly record bonds payable and lease transactions, didn’t submit a data collection form required for its federal grant funds, and didn’t provide capital assets info to the company it uses to track inventory.
Overall, the village was more than $1 million in the red for 2011, according to the audit, and Rue added that this year alone, Monticello has at least $1.7 million in uncollected property taxes.
“It’s a sinking ship,” observed Trustee Larissa Bennett.
Musa didn’t identify any cases of fraud or other illegalities, nor did he find severe weaknesses in the internal controls.
He also didn’t blame anyone, including Treasurer Heather Berg, noting she’s part-time in a position which he said requires a full-timer.
“Part of it is not her fault because she took on a little bit too much by doing a job that requires more than three hours a day,” Musa told the board.
But he did wonder if she might need more training, telling trustees that “as time went on, I lost more confidence in what Heather was doing.”
The board subsequently argued over Berg, who wasn’t present but is back with the village after resigning from the position twice this year.
“We have a problem,” said Trustee Rue, criticizing Mayor/Acting Manager Gordon Jenkins’ decision to have Berg help him find a permanent, full-time treasurer. (That search so far has resulted in several candidates who backed out, said Jenkins.)
Trustee TC Hutchins decried conflicting, confusing information in budget reports, wondering if any of his colleagues “have a clue where the budget’s going” in the future.
Trustee Bennett replied, “No, but I can get an update.”
Jenkins indeed recommended board members talk to Berg.
“I’m not going to sit here and go back and forth with you,” he told Hutchins. “... She’s not here to defend herself, so I’m not going to talk about it.”
“The numbers are talking,” Rue replied.
Berg later provided a statement to the Democrat, noting that she had not been informed of the presentation ahead of time and questioning the conclusions (see sidebar).
Regardless, Musa said Monticello has cash flow problems because “the money is just not being collected.”
To date, an agreement to once again have the County Treasurer’s Office handle foreclosures for the village has not been codified or signed, though the board already voted to enter into such an agreement.
The issue surfaced again during the regular board meeting later that evening, when Hutchins and Rue declined to approve paying $2.6 million in bills.
“After the report of the auditor, absolutely not!” Rue stated.
“The information we’re getting it’s not current,” lamented Hutchins of financial reports, saying info changes “dramatically” from one report to the next.
Jenkins again defended Berg, saying he had spoken to her about the bills.
“I’m comfortable and confident of what I have here to vote for,” he said, and trustees Bennett and James Matthews agreed.
Hutchins continued to question, but Jenkins cut him off, arguing that it was time to “move forward.”
Yet when the very next item on the agenda to adopt a series of budget transfers was tabled by Jenkins, Hutchins was incredulous.
Jenkins responded by recessing the meeting for five minutes, whereupon he left the room, while the rest of the board stayed behind to debate further.
During public comment at the end of the meeting, Berg’s father Erick chastised the board for criticizing his daughter.
“Heather’s got more than a full plate right now,” he said, listing five kids and a full-time job elsewhere in the county as her priorities.
“Who’s representing the interests of the taxpayers here?” he wondered, saying he believes Jenkins is trying.
For the complete audio of both the audit presentation and the subsequent board meeting, see http://archive.
In other business
• Bennett was named deputy mayor by Jenkins.
• A firm hired to help the village reach savings on its lighting infrastructure found $29,000 worth, said Jenkins. The village realized $18,000 in savings after the firm received its fee, he reported.
• Resident Tom Rue told the board that a village water tank is leaking severely. Officials replied that they are aware and that the tank’s repair is part of a $15 million water/sewer overhaul now in the works.
• Volunteers are needed for a May 18 workday by the Monticello Beautification Group, which will focus on beautifying Dillon and DeHoyos parks and the Broadway corridor. No experience is required just gloves. Contact Kathy Fielding at 798-2479 or firstname.lastname@example.org to sign up or for more info.
Treasurer Heather Berg’s response
Firstly, I wasn’t made aware of the audit work-session that was taking place prior to the board meeting. If I had known, I would have been there.
Secondly, every process owner has the right to review the findings, and every prudent auditor will review the audit findings with the process owner. As the process owner, I was not privy to the findings addressed in the audit. As a result, all was not considered and some of the findings have been misrepresented.
I have no awareness of the specific issues raised in the report; for that reason I am questioning the accuracy of some of the reported concerns.
Unfortunately, strengths aren’t cited in an audit report. The intention of an audit is to find issues and report them with the hopes that they can be corrected in the future. The issues in this audit have all been resolved and corrected for 2011 and going forward.
The auditor has personally asked me to stay in the role as Treasurer. The auditor’s refusal to continue their oversight of the village’s finances is just another consequence of a dysfunctional environment that sends quality staff running for the hills. It is difficult to work in surroundings where accusations are constantly being thrown to make one appear incompetent, ignorant and corrupt.
I am looking forward to the mayor hiring someone new to fulfill this role. I have only offered to remain in this role until that time comes to ensure that the bookkeeping remains current.
(Editor’s Note: Auditor Ed Musa was given an opportunity to respond but declined, citing client confidentiality. He did say that when he originally called village officials to discuss the audit weeks ago, he was told Berg had given her notice and was no longer employed there.)