Council erupts over bookkeeping error
By Kate Daly Contributing Writer

Marlborough - An otherwise quiet meeting broke into raised voices and calls for disciplinary action when Mayor Nancy Stevens and the city's auditor and comptroller explained a bookkeeping error that took six months to identify and rectify.

The $1.5 million error changed the amount of free cash the city has for fiscal year (FY) 2008 from about $5 million to nearly $3.6 million but did not result in any shortfalls or cost to taxpayers, according to council Finance Committee Chair Michael Ossing.

Councilors asked questions and demanded explanations for how the accounting error occurred, while Stevens, Comptroller Tom Abel and Auditor Diane Smith sat before the agitated council members.

"This is not the first issue we've had with a significant amount of money," said Atlarge Councilor Patricia Pope, a concern voiced by several councilors. "Somebody has to be held accountable."

The error occurred between the end of June and early July 2007, and was discovered by the city's outside auditors in January. Abel explained that the end of the fiscal year created a situation in which the error was made.

"June is a very heavy month for money going out of the system," he said, with $13 million to $15 million being spent from city coff ers to close the fiscal year, as much as twice a typical month.

The $1.5 million was the fourth quarter FY 2007 payment to the city retirement fund. The money was paid July 2, 2007, because June 30 was a Saturday, he said. Payments for the fiscal year ending June 30 can be made through July 15, Abel explained.

"The payment was not reported until July 30," Smith said. "It was booked in '08. The funds should have been encumbered."

Because the funds were not encumbered, or reported as spent in FY 2007, the city books showed an extra $1.5 million in free cash for FY 2007.

In the future, the city will report payments made in July separately for payments made for the previous fiscal year and payments made for the current fiscal year, Abel said.

Stevens noted that as soon as the auditors brought the issue to the attention of Abel and Smith, they informed her.

"They brought it to my attention and off ered solutions," she said.

City Council President Arthur Vigeant raised the question of the qualifications of the financial staff , asking how many employees had taken continuing education classes in the last year. Other than Abel, no other employees took classes in the last year, Abel said.

Smith is pursuing her certification as auditor. Appointed last year, Smith noted that the certification exam for auditor is given once a year, and the next exam will be her first opportunity since her appointment.

She also said she was surprised to get only one visit and one phone call from councilors after the issue came to light.

Vigeant protested that it was up to the finance team and the mayor's office to provide a full explanation of what happened, and not the councilors' job to dig out the facts.

"I don't want to hear excuses anymore," Vigeant said. "I need people in there who can do the job."

Ward 2 Councilor Paul Ferro said he was concerned that the mayor, who had direct authority over both Abel and Smith, has taken no disciplinary action.

Ossing noted that while the city budget has grown, the fi- nance team has gotten smaller. The error is the first of its kind he's seen in the eight years he's been on the council, he said.

"There was not a nickel lost … This was an accounting error," he said. "The focus here is: what do we do better next time?"

The council referred the matter to the Finance Committee, with instructions to provide correspondence from the state Department of Revenue regarding the issue and to talk with the mayor as well.