Essex has joined a growing list of towns that have been audited recently. It seems pretty universal that the auditors aren't happy with many small town's bookkeeping. In our case there was no fraud, or malfeasance. Our town clerk failed to bill our neighboring town for some transfer site tickets and that was the only missing money. That was easily cured. The problems are accounting and reporting methods and procedures.
Our supervisor's clerk had asked many times for the auditor's office to come up and help her set up things differently, particularly for capital projects and the water billing, and they never had the time. She asked them to recommend an accounting program, and was told they didn't recommend any of them. The accounting was basically the same for 25 years and other audits never noticed the errors, and I admit there are some errors. I'm an engineer with no accounting training. While I can check the math and see if everything balances, I couldn't provide her any expertise in setting up proper reporting procedures.
The auditor said the Town Board never knew how much money the Sewer District owed the town. That is incorrect. Every time the Town Board approved a loan to the Sewer District, the Town Board was told what that loan brought the total loan to. When they voted for a drawdown, they were told what that would reduce the total to.
The auditor faulted us for cutting our 2009 appropriations by $400,000 during the 2009 year. The economy turned bad and we could see we were not going to reach our projected revenues. By cutting expenses, instead of a huge budget shortfall, we actually ended up with a $30,000 unexpended balance. We had hoped to have a little larger unexpended balance to reduce the 2010 tax levy a little more in continued tough times. I don't understand why the auditor considered that a bad thing.
While there are certainly needs for improvement in our books, there is also room for improvement in the auditor's office and the auditing process as well. When a town asks for help, help needs to be provided. Our auditor huddled mostly with one person and they need to expand that. I live 1 mile away and could have easily answered several questions that the auditor spent hours, if not days, researching if he had asked. I have talked to several Town Board members and they spent little time with the auditor. The report is also poorly worded and misleading. The auditor correctly criticizes the smallest error by us and then makes several errors in his report.
The auditor correctly states that the Town Board audited the town justice and the town clerk yearly, but incorrectly states we failed to audit the tax collector. The town clerk and the tax collector are the same person so yes, she was audited. The county audits the tax collector each year as well since her final report to them must balance exactly. The auditor also said we failed to audit the supervisor, supervisor's clerk, and the code officer. The town clerk/tax collector and the town justice are the only offices that handle and record money and both are audited by the Town Board. There are no other transactions to audit other than those presently being audited.
The state wants towns to repay any interdepartmental loans each year. There are no state grants for "seed money" for planning. It is impossible to plan a project of any size, receive funding, get permits and start construction in one year. In the case of a sewer district, you can't even form a district in one year. Where does the money come from to pay that loan back in one year? Infrastructure planning is a long term investment for a town and should be treated as such. New York needs to look closer at this requirement or help towns financially with planning.
I believe that the state must provide additional training for supervisors, and other Town Board members, other than the traditional three day "How to be a supervisor school." Accounting training - either through the Community Colleges or directly from the state - should be a minimum. I'm afraid the days of a $20,000 a year bookkeeper are gone. Bookkeepers should be provided extensive accounting training and then must be fairly paid for those skills when acquired. The town clerk/tax collectors is also in the same situation. To provide the accounting procedures, methods and reports now required, I'm afraid the price of local government will be going up.