Thursday, December 12, 2013
By Gillian Graham firstname.lastname@example.org
OLD ORCHARD BEACH – An auditor told the Town Council on Tuesday that the town's finances are in "rock solid" shape but more financial controls should be implemented.
Ron Smith of RHR Smith & Co. said the fiscal year 2012 audit showed the town is in good financial shape, but he raised concerns about internal controls including the reconciliation of bank deposits.
Smith, who has spent about five months working on the audit, suggested that the town develop a "blueprint" for change. He said a "weak area" in the town's finances is how time-consuming and confusing it can be to look at financial records.
"There appears to be chaos and confusion in your books," Smith said, noting that he had to review records multiple times to understand how and why things had been handled in particular ways.
In a presentation to the council in December, Smith outlined his "grave" concerns about the town's finances, including checking accounts that had not been reconciled, tax issues and a lack of financial controls. At the time, the town's primary checking account had not been reconciled in more than a year.
On Tuesday, Smith suggested the Town Council evaluate its resources to determine whether the town has the staff needed to handle better financial controls. He said it may be prudent to hire a staff accountant if no one on staff is trained to handle those responsibilities.
Smith recommended that all bank accounts be reconciled within 21 days of month's end. He also recommended the town keep a closer eye on capital projects funded by bonds to ensure there are no costly overruns, as happened with a sewer project that was $500,000 over budget.
Councilor Robin Dayton said she believes -- and has for years -- that the town needs a staff accountant.
"We don't have the appropriate resources we need to do everything correctly," she said.
Dayton said the town's financial issues date back years and have not been properly addressed by the Town Council. "I think we're finally acknowledging it's broken," she said.
"I do agree it is broken," Smith said.
Finance Director Diana Asanza, who has been with the town for about five months, said she believes the town needs to establish consistent procedures including a "good segregation of duties." Accounts are now taken in and reconciled at the same desk.
The audit will be finalized soon and is not expected to change substantially, Asanza said.
Also Tuesday, Kate's Homemade Butter won a reprieve as the council did not move to pull the home business' license.
Kate's faced a potential revocation of its license after missing a meeting this month with the town's administrative review board and neighbors.
-- Staff Writer Jessica Hall contributed to this report.
Gillian Graham can be contacted at 791-6315 or at: