- Last Updated on Wednesday, 25 March 2009 18:50
- Published on Wednesday, 25 March 2009 18:50
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Colonial Beach financial record keeping difficulties that have been at least twenty years in the making are this Wednesday morning’s topic of discussion in the Town of Colonial Beach. Town and school audits will hear from auditor Nancy Miller at a meeting scheduled to begin at 9:00 a.m.
The Miller Foley Group’s audit of town government and school division financial records associated with the 12-month fiscal period that ended on June 30, 2008 identified a multitude of problems.
Numerical values associated with auditor findings were unavailable at the time of this reporting, but Colonial Beach Mayor Fred Rummage told The Journal on March 9 that problems are far worse than he had previously supposed.
Rummage won election to the office of Colonial Beach Mayor in May 2008, following two years of service on Town Council. A retired attorney and former Maryland legislator, he vowed to introduce a greater level of transparency to town business that would be dominated by concerted efforts to resolve the problems that had not been properly addressed by prior administrations.
New in 2009’s audit reporting is the return of auditor Nancy Miller to review the town’s financial records. Miller was previously associated with an audit firm known as Tingler and Miller, whose services as town auditor ended approximately seven years ago.
According to the narrative portions of Miller’s February 2009 draft report, the problems cited as a result of the financial professional’s past visits to the town were never properly resolved.
The difficulties associated with financial record keeping in the Town of Colonial Beach were not altogether unanticipated. During 2007 some elected officials identified instances in which unappropriated monies had been expended by the school division and also by the municipal government.
The town government’s introduction of a more modern financial accounting computer software program was intended as a measure that would correct shortcomings associated with previously financial record keeping efforts. Improvements were noted by Colonial Beach’s previous auditors.
Those reports encouraged the school division to convert to the same financial accounting computer software program that the local government converted to as long ago as 2004. Despite ongoing discussions, the school division has continued to use a computer-based accounting program of its own.
By April 2008 Town Council had instructed the town’s chief finance officer to implement a new set of protocols in order to ensure that the Colonial Beach school division expenditures did not result in financial deficit conditions.
In order to comply with modern accounting requirements, a Colonial Beach police officer, Ryan Hood, was charged several years ago with developing an inventory of the municipality’s fixed assets.
The tasking included compiling a list of all town owned properties and equipment, including an inventory of office computers, copy machines and miscellaneous equipment. The new audit asserts that as of June 30, 2008 the inventory of the town’s fixed assets fails to meet the requisite standard.
Financial records were a major issue in Colonial Beach’s 1990 and 1992 general elections. By 1992 it had become understood that the town’s government and school division needed to invest in an integrated financial accounting software package and a program known as SDS was purchased by the town.
Hopes that the new accounting system would resolve lingering financial records keeping problems were thwarted as quickly as the Robertson, Farmer and Cox audit firm released the findings associated with its audit of the 12-month budget period that ended on June 30, 1993.
Internal controls were that audit’s big issue and efforts were made to create a system of checks and balances that would provide appropriate oversight. Despite the town’s concerted effort, accounting problems continued to be identified in annual audits. SDS went out of business and successor computer software vendors attempted to improve the workings of the integrated computer software program.
As long ago as summer 1992 a Colonial Beach Treasurer had attempted to persuade Town Council to purchase the integrated financial accounting computer software package known as the Bright System, but the town delayed its conversion to the Bright System until 2004.
When Council became vocal during 2008 about the school division’s need to utilize the Bright accounting system, proponents of the transition were advised that the Bright package may be already obsolete.
Nancy Miller is expected to make it known on March 25 just exactly how problematic Colonial Beach government and school division financial record keeping problems have become.
Westmoreland Commonwealth’s Attorney Dean Atkins will reportedly review the final report and then determine whether or not criminal charges should be brought.
The already disclosed audit finding that Colonial Beach school division expended unappropriated monies may or may not have a serious legal consequence. The audit identifies as many as 19 serious town government and school division financial accounting shortcomings whose cause may be linked to inadequate checks and balances or, in auditor language, internal controls.
Once again Colonial Beach has an audit suggesting the town is unfamiliar with modern accounting principles. Problems include the manner in which trial balances, account reconciliations and debt service payments are recorded. The report asserts that proper levels or monitoring did not occur and senior management may have over ridden the established set of internal controls.
A portion of the reported record keeping problems may be associated with inadequate communication between the members of the local government and the Colonial Beach school division.
School division and local government changes in administrative personnel may have created additional financial reporting difficulties identified in the audit that will be this Wednesday’s discussion topic in the Town of Colonial Beach.