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Date: 12/12/2022
WESTHAMPTON – At a meeting of the Finance Committee on Dec. 7 members learned the town’s previous treasurer, Jennifer Day – currently the treasurer in Southampton – left about seven months of the town’s cash receipts and other income unprocessed when she vacated the position earlier this year.
The collapse in processing and reporting incomes set off alarm bells for Town Accountant Joe Boudreau.
“The town accountant is at the end of the assembly line,” Boudreau said, “so nothing happens until everything gets passed down to the town accountant. What was happening was, that we were six to seven months behind in turning over receipts” for the town’s various types of income.
On Aug. 1 Boudreau sent an email to the Select Board and members of the Finance Committee expressing great concern that, as the town employee who submits fiscal information to the Department of Revenue (DOR), he had not received much of the income data he needed to send in. As a result, significant state aid and other revenues were in jeopardy.
Boudreau informed the Select Board and Finance Committee of the risks. The accounting for fiscal year 2022 is usually closed out and completed in early September. That step makes it possible for the DOR to certify that the town’s free cash balance is accurate. That has not happened yet. Without the certification of free cash the tax rate for real estate cannot be set, or will be set late.
The tax rate has not been set yet.
If tax bills do not go out to ratepayers before Dec. 31, third quarter taxes are not collected until a May mailing of tax bills. That would significantly disrupt cash flow. The town would probably make up the difference by borrowing in anticipation of revenues, an undesirable option. Of more concern, for Boudreau, was that he could not file Schedule A on time.
“Schedule A…reports to DOR all the revenues and expenditures that come in,” Boudreau said. “They need that report. If it’s not filed by a deadline…they withhold state aid that comes in monthly to the town. That report was due on Nov. 3.”
Westhampton’s Schedule A has not yet been filed. Boudreau reported to the Finance Committee that information for certifying the town’s free cash went to the commonwealth that week. The DOR maintains a grace period of a month or two, according to Boudreau, before sanctions begin and aid is withheld. The Dec. 31 deadline for mailing tax bills is also rapidly approaching.
Day was contacted at the Southampton treasurer’s office. Day said she does not work for the Town of Westhampton. When asked if she was the right person to talk to about this matter she told Reminder Publishing, “No.”
Selectboard chair Phil Dowling told the Finance Committee he was first alerted to the bottleneck in the accounting of receipts by Tax Collector Patty Cotton. Cotton served as the town’s treasurer in the past and knows the town’s accounting in detail. Dowling let the two treasurers, past and present, confer on how to catch up on entering receipts. Day voiced no need for additional support or help, but ultimately left the position.
Cotton stepped in to help figure out the mess. She and Boudreau worked weekends, for six or eight weeks, to complete the processing of receipts. The dire consequences that could have damaged the town’s fiscal health appear, at this point, to be averted.
“I can’t speak enough of how fortunate the town was to have Patty,” Boudreau said. “She is the institutional knowledge. Without her…[we] would still be waiting. I closed the books yesterday, and this morning at 8:41[a.m.] I filed with DOR for free cash.”
Town officials speculated that a shortage of time may have been behind Day’s troubles. Dowling also commented that treasurers have “a rare skill set.” The town hired a previous candidate for treasurer, but that candidate realized his skills weren’t up to the job and backed out of it. The churn at the position may have accounted for the somewhat lengthy time it took to discern the problem.
Day did process the warrants and payroll in a timely fashion, ensuring that employees received a paycheck. Warrants are signed by Select Board members before checks are issued. Signing warrants may have preserved the sense among board members that Day was performing the other duties of her position.
Finance Committee member Scott Stanton questioned how internal controls could fall down so completely.
“If this is not a new process,” Stanton asked, “what went wrong this year?”
Boudreau admitted it was a head scratcher, he couldn’t explain how such circumstances, dangerous to the fiduciary reputation of the town as well as its coffers, could come about. Boudreau did tell the gathering that a silver lining for the town is that Cotton found a number of accounting system glitches, small fixes that could improve the town’s books.
Finance Committee members were also introduced to the town’s new Treasurer, Aimee Burnham, who is also the treasurer in Huntington. Burnham said, “But I started on the Finance Committee.” Burnham, experienced in both treasurer and Finance Committee roles, has been following Cotton around the office, asking questions about town accounting to get a better sense of any nuances of the system.
Boudreau couldn’t stop singing about Cotton.
“You could have hired an accounting firm to come in, but they would have cost a lot of money, number one, and they still would’ve taken a lot of time to find out what Patty already knew,” Boudreau said. “She was very important in the process, and…she’s the only one in town who knows history.”
Finance Committee chair Tad Wiess agreed.
“Big sigh of relief. Huge thanks to Patty,” Weiss said. “[And] the good news is, I think we’re back to where we should be.”