By Michael Howell
After falling years behind in audits of the Town’s books, the Stevensville Town Council got the word at its last meeting that no audit opinion was possible for the Fiscal Years ending June 30, 2010 and June 30, 2011 because there was not sufficient information to even make an assessment. Not only were bank reconciliations not being done, there were no invoices available to check expenses against.
Mayor Gene Mim Mack gave a brief recounting of how the situation had developed over the years. He said it began under Mayor Lew Barnett’s term when the Town engaged an auditor who was very unresponsive and through long periods of lack of communication the Town found itself “behind the eight ball” as far as the audits go. He said another auditing firm was hired but that also turned into something of a fiasco as the firm fell on hard times and started making major cutbacks in its work force, throwing the Town even further behind.
Mim Mack described the situation when he took office as very frustrating and extremely embarrassing. However, the Town was now moving forward with the auditing firm of Galusha, Higgins & Galusha.
A representative from the company stated that as a result of their review of the books for FY 2010, they could not render an opinion on the veracity of the Town’s financial statements for that year.
“The Town did not maintain adequate accounting records so there is insufficient material to form an opinion,” he said. He said the auditors were also unable to satisfy themselves through other audit procedures that enough information was in evidence to base any opinion on.
He then said FY 2011 was “a mirror image of 2010.” Once again bank accounts were not reconciled and no invoices were available.
“We are not saying they pulled figures out of clear air,” he said, “we just can’t verify them.”
A single audit was done concerning federal monies focusing on the Town’s wastewater treatment improvement program. That audit was clear except for one question about whether wages being paid on that project were in accordance with the terms of the Davis-Bacon Act.
“We aren’t saying they weren’t. We’re just saying there is no evidence that they were,” said the auditor.
Finally in FY 2012, the auditors got a foothold and were able to render an opinion. Through various changes in the Town’s staff and operating procedures the auditors got enough documentation and sufficient material to conclude that “there is reasonable assurance that financial statements are free of material misstatements and give an accurate picture of the Town’s finances.” Questions about the Davis-Bacon wages showed up again in reviewing two federal programs.
“We didn’t come across anything that would indicate fraud,” said the auditor, “but we can’t say that there wasn’t.”
Mayor Mim Mack stated once again how embarrassed he was by the state of the Town’s bookkeeping when he took office, but that he and the town staff were working hard to set things straight and have made huge progress. He said he hoped to look back on it as a learning experience as the Town goes forward.
In other business, the Council is trying to set some priorities for its Committee of the Whole discussions. It was agreed to focus in February on revising and updating the Town’s development code. In March they would tackle the issue of electronic signs and possible regulations. In April they will work on analyzing water and sewer rates and consider potential changes. On the long list of items to be considered are update of Council Rules, an assessment of the Town’s physical facilities, creation of a tax increment-urban renewal district, creation of area-wide park and cemetery districts.
The Council approved the Mayor’s recommendation of placing local architect Meghan Hanson on the Town’s Planning and Zoning Committee.
Police Chief James Marble gave the council an update on the cemetery vandalism situation. He said two suspects had been identified and linked with the first two acts of vandalism at the cemetery. That could lead to misdemeanor charges against the suspects. However, he was still hoping for more credible evidence that may link them to the third act of vandalism which was a felony case due to the amount of damage that was done.
“It’s got to be direct evidence, not just hearsay,” said Marble. He said there are potential witnesses in the third case but that they are juveniles and their parents have expressed concerns about their children becoming involved in the case.
Marble said it was not an impossible situation, but a difficult one.
“We are not giving up hope, but it is not going as quickly as we would like,” he said.