Dewey’s independent auditor TGM Group may have given the town a thumbs up related to last year’s financial statements, but that doesn’t mean the firm thinks everything in town is hunky-dory.
During a town audit committee meeting Aug. 17, as members reviewed the auditor’s annual communications letter, TGM Partner Roy Geiser said the town should separate duties related to finances among several people, improve the speed and accuracy of financial reporting, prepare periodic reconciliations of town assets, and fix broken lines of communication among council, management and staff.
“This is everyone’s issue,” he said.
Geiser, who has been working with Dewey since it embarked on the tedious task of reconciling its bank records months ago, said the breakdown in reporting lines was a cultural issue and not just in one area. He said the cultural problems are affecting every aspect of town government.
The committee was meeting for the first time since Dewey property owner Jeffrey Smith was charged with theft for failing to return a draft audit report and then served a no-contact order by the Dewey police department.
This time around, committee Chair Larry Silver came with copies of the discussion document – the final draft of TGM’s audit communications letter – for members of the public to take. The letter is part of every annual audit, and is different from the council-approved agreed-upon procedures report that TGM also created. Silver noted this was the first discussion of the communications letter that was taking place in a public meeting.
Mayor TJ Redefer was in attendance. He said he wanted the discussion to take place in the open for full transparency.
In addition to noting cultural deficiencies, TGM created a list of recommendations. Geiser said the firm recommends the town create a formal accounting policy and handbook, develop a policy for handling and recording donations, evaluate the town’s use of the military surplus program, require department heads to review timecards from each pay period, create a whistleblower policy and update the town’s investment policy.
Town Manager Scott Koenig, who was hired by the town in February and began working in March, said he’s aware of the cultural issues and is working with town staff to make the necessary changes. If there are unanticipated expenses or donations, they have to be reported at fair market value and the town will go from there, said Koenig. Sometimes that means the town has to go to council for a budget amendment, he said.
Koenig said a vehicle replacement schedule is needed; if that requires changes to the budget, then amendments to the budget need to be discussed, he said.
Culture is something that happens over time, Koenig said, adding, in many ways the town doesn’t know how much it owns because of poor record keeping.
David Moskowitz, investment committee chair and candidate for commissioner, said the auditor made several errors in regard to the investment policy, which he quickly explained and then confirmed by Silver. He said the errors were what they were, but it was the fact that TGM never followed up with him that annoyed him the most.
“If I didn’t take the initiative to look over the audit report after all the news headlines, I wouldn’t have known,” he said.
Geiser said he understood the town would not immediately implement the recommendations because the town is a quarter of the way through its current fiscal year, but he said he would like to see the changes in place by the beginning of the 2020 fiscal year, which is April 1, 2019.
At the conclusion of the meeting, Koenig said he had no objection to TGM’s recommendations. They all seem to make sense, he said.
Silver said the committee has 60 days to approve the document from the issue date of Aug. 3.