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Sunday, July 31, 2011

New Hartford General Fund in the whose standards?

The Town of New Hartford's last independent financial audit was as of December 31, 2008.

On January 26, 2011, the town board voted to retain D'Arcangelo and Co. to perform an independent audit of the Town of New Hartford for 2009 and 2010; the audit was to be completed by March 31, 2011. We have a copy of the Engagement Letter between the town and D'Arcangelo dated February 2, 2011.

The completion date of March 31, 2011 has come and gone. We have FOILed copies of the audit, the management letter, etc. twice; once on April 28th and most recently on July 28th. Each time we have been told that:
"...the Town does not have this document yet, as the report is not completed. However, it is expected to be completed within a couple of weeks."
It is well past the time that the town is required by law to have an independent financial audit performed, although when it was time to hire an outside auditor for the 2009 Financials, Supervisor Tyksinski and Town Attorney Cully disagreed with the NYS Comptroller on the interpretation of town law and one was not done; that is why D'Arcangelo & Co. was hired to do a 2009 and 2010 audit of the books.

Since the time of the last independent financial audit [December 31, 2008] prepared by Barone, Howard & Co., we have learned that:
The 'rainy day' fund was depleted to the tune of $2.8 million and there has been no clear-cut explanation as to where it went.
The police fund owes the General Wholetown Fund money [the exact amount depends on who you ask].
The Sewer Maintenance Fund is owed over $1 million because it was used to 'plug the holes' in other accounts.
According to a recent Observer Dispatch article, the General Fund is now in the black; however, we have no documentation to substantiate that other than the Supervisor's Report to the State Comptroller [AUD] that was supposed to be filed by May 1, 2011 and wasn't filed until a couple of months later.

Again, according to the July Observer Dispatch article:
The town’s 2010 annual finance report was due to the state Comptroller’s Office by May 1 but was completed just recently. Tyksinski said the delay was largely because he wanted the report to be in line with the town’s outside audit for 2009 and 2010 by D’Arcangelo & Co.
The 2010 annual finance report supposedly has been filed, so what is the excuse now?

According to the AUD, the General Fund has a balance of $266,052; however, that report is not an independently audited report; it is merely the Supervisor's report to the State Comptroller.

According to the State Comptroller's instructions for filing the AUD:
Notes to the Financial Statements
The Notes to the Financial Statements should represent specific disclosures necessary for a fair and complete presentation of the financial statements. Notes to the Financial Statements are required to be filed with the Annual Update Document (AUD).
There is also supposed be a page where the Supervisor certifies that the information provided in the report is "true and correct to the best of my knowledge" along with the date of filing the report to the NYS Comptroller.

There were no Notes to the Financial Statement or certification attached to the copy of the AUD report that we were provided when we FOILed.

The Observer Dispatch also reported Supervisor Tyksinski as saying:
Tyksinski said 2011 will end with another budget surplus, and he plans to cut property taxes in 2012.
Bold statement to make when budget time is right around the corner and the independently audited financial statements for 2009 and 2010 are yet to be "in the hands of the town".

How long will it be before Town of New Hartford residents receive an independent report on the financial condition of the town. We started the clock on December 31, 2008, the "as of" date of the last report.

Nine hundred and forty two [942] days and counting...

1 comment:

MadSpartan said...

Unlike governments, businesses are required to record liabilities when they are taken on. Companies can't accrue liabilities without reporting the loss to their shareholders, but that's exactly what the government does do. The government records no spending until it writes a check. This deceptive accounting trick allows the government to greatly distort it's financial situation, making things appear far better than they really are. The amount of the government's unfunded liabilities is a number so large that it's difficult to even get your mind around it. We must take away the government's credit card. With limits on both tax revenue and borrowing, the government would finally be forced to get serious about spending cuts.