Administration Adii i makes $1.4 million accounting error
By Doug Grindle Community Reporter

Marlborough - The administration of Marlborough Mayor Nancy Stevens was sharply criticized by city councilors at their Jan. 28 meeting, after it emerged that an accounting error has caused to city to overstate its free cash by almost $1.5 million.

City officials said a health care payment of $1.451 million due this fiscal year had been mistakenly placed in the accounts for next year. The result was to overstate the amount of cash on hand by that amount.

The error was caught by the city's outside audit firm, which was checking the accounting done by the city's financial officers.

The error sparked calls from councilors that the city auditor's role be changed and the audits be reported directly to the City Council rather than the mayor, which is the current practice. The auditor checks the city's financial accounts, including those prepared by the office of Comptroller Tom Abel.

City Council President Arthur Vigeant told councilors the auditor needs to work for the council, not the mayor.

"The city auditor should be reporting to the City Council and not to the same person the city comptroller reports to," Vigeant said.

He said this is not the first financial error in the city.

"We've been off base to the tune of millions of dollars on the city side," he added.

Vigeant also sharply criticized the administration for allowing such a large accounting mistake to happen. He said it is not the role of city councilors to catch those mistakes.

"Our job is not to come in here and analyze everything to make sure the calculations are correct," Vigeant said. "Our job is to take the figures and make decisions."

Other councilors also expressed their unhappiness.

Ward 3 City Councilor Scott Schafer said he was amazed that the error was not caught by the city's own internal checks and balances. He called on the system of financial checks and balances to be overhauled "to make sure this will not happen again."

At-Large City Councilor Michael Ossing echoed Schafer's concern.

"What do we have to do differently to make sure it doesn't happen again?" he asked.

Stevens said the error was corrected by the city's existing procedures.

"The system of checks and balances which the city has in place has served the city well in identifying this oversight," she wrote in a letter to the council.

Stevens told reporters the error was understandable because city administrators are human.

"Mistakes are bound to happen," Stevens said. "The outside audit was able to catch the error."

Ossing said the city is in a strong financial position and that would make it relatively easy to adjust for the error.

"If we didn't have any of that, we'd be scrambling, so that it would be a big deal," Ossing said.

The city started out the fiscal year with $5 million in its free cash account, according to Ossing. After a series of expenditures, including $1 million to lighten the tax load on residents and $1 million put into the stabilization "rainy day" account for future use, the city had $2.8 million in free cash left.

With the error corrected, the city is left with $1.4 million as free cash.

Ossing said he was glad the error was discovered before the amount of free cash was exhausted.

"I'd rather find it now," Ossing said.

The City Council voted unanimously to direct the mayor, the city comptroller and the city auditor to appear before them at the next full meeting of the council, to explore what went wrong and what can be done to prevent errors in the future.