WELLFLEET — A plan has been put in place by town officials to try to address the issues raised and recommendations made by the Powers and Sullivan company after an audit it performed showed several weaknesses in the town’s accounting practices.
A spreadsheet listing the auditors’ recommendations, how the town plans to address them, the stakeholders involved, and a timeline for action is now available to the public on the town’s website.
The critical tasks mentioned in the audit have been prioritized with action plans and schedules, Interim Town Administrator Charles Sumner told the Select Board at a meeting last week. “Our goal is to work on it daily,” he said.
The audit received on May 3 indicated several weaknesses in the town’s accounting practices. Powers and Sullivan gave 15 recommendations to correct the weaknesses, the most damaging of which was the material weakness in the cash reconciliation process. Monthly reconciliations between the treasurer’s office, accounting office and the bank the town uses hadn’t been done for more than a year, leaving the town vulnerable to theft.
Interim accountants needed
Sumner has hired Lisa Soave and Mary McIsaac as interim accountants who will wage a two-pronged strategy to address the deficiencies. Sumner called the two “seasoned, professional, Massachusetts municipal finance officials.”
Wellfleet is expected to need them, based on the audit.
Soave will work with department heads to create a chart of accounts tailored to their needs. A chart of accounts gives a breakdown of the financial transactions conducted in a certain time frame, such as a fiscal year. This will be a tool for them to manage their departments, providing the financial information they need, Sumner said.
What are the problems?
McIsaac will concentrate on financial practices and activities dating back to July 1, 2019, when the town instituted a new financial management software system called VADAR. The implementation was done with little training or follow-up, officials found. Staff turnover in critical leadership roles made the problems worse, Sumner said.
‘We’re looking for stability’:Charles Sumner offered interim town administrator position in Wellfleet
Michael Nelligan, partner at Powers and Sullivan, agreed. Between the turnover in the accounting department and the Town Administrator position, and the implementation of VADAR, the town lost a lot of institutional knowledge, he said.
Fire Chief Rich Pauley called the VADAR rollout a huge disappointment. “There wasn’t a lot of buy-in and there wasn’t much training,” he said. “I’ve never seen the implementation of a major financial system that went as poorly as this did.”
But Pauley is convinced that Sumner is moving in the right direction. “We’re on the right track,” he said.
For each of the recommendations given by Powers and Sullivan, the plan includes tasks that need to be done, stakeholders who will be involved in the process, action plans and target dates for completion.
What’s the plan?
Documents and information will need to be gathered. Department heads and various town officials — including the assessor, treasurer, tax collector, payroll coordinator and finance officials — will be involved. Policies and procedures will need to be rewritten. Sumner, Soave and McIsaac will be involved throughout the process, and they will provide biweekly updates to the Select Board and Finance Committee.
But the process won’t start in earnest until after the June 26 town meeting, Sumner said. The push to get the operating and capital budgets finalized and the town meeting warrant completed takes precedence. “We’ll have a better sense of the timeline in a month,” he said.
Housing headaches:Can a new bylaw help Wellfleet solve a crisis for workers, residents?
The state Department of Revenue has committed to coming in to evaluate the town’s financial operation, Sumner said. That has been delayed because of the transition.
In spite of the auditing problems, Wellfleet has a solid AAA bond rating, according to Sumner. He cited reasonable cash reserves, a strong tax base and good revenue streams for that rating. The town had 10% of its operating budget in cash reserves in 2019, according to Select Board Chairman Michael DeVasto.
“Taxpayers should feel confident that we have a highly experienced team in place,” Select Board member Justina Carlson said.
Contact Denise Coffey at dcoffey@capecodonline.com. Follow her on Twitter: @DeniseCoffeyCCT.
Leave a Reply