We were amazed to learn that an organization that had applied for government grants and received them had never obtain a full audit; they were merely paying for reviews and compilations. Additionally, the information made available to trustees at each meeting didn't appear to correspond with the IRS 990 and the compilations each year.
Here is a short video clip of the May 16, 2012 library trustee meeting in which Treasurer Earl Cunningham confirms that an audit has never been conducted on behalf of the library:
According to the minutes of the June 20, 2012 Board of Trustees, Earl Cunningham's report says "If our proposition to re-charter passes, we will conduct a full audit next year."
Next year? How about BEFORE you ask the taxpayers to fund a million dollar library? Once the vote to recharter passes and the budget is adopted, the taxpayers will have no choice but to continue to fund the library for the same amount each year until a new budget is presented for a vote.
The last compilation that has been completed is for 2010 and was done by Mr. Dan Dreimiller. We FOILed Mr. Dreimiller's "Letter of Engagement" dated January 14, 2011 and signed by Library Treasurer, Earl Cunningham, on July 5, 2011.
In that letter, Mr. Dreimiller makes it quite clear that he is merely compiling information given to him by the library treasurer when he writes:
We will compile, from information you provide, the annual financial statements of the New Hartford Public Library as of December 31, 2010....Mr. Dreimiller explains in his letter:
A compilation differs significantly from a review or an audit of financial statements. A compilation does not contemplate performing inquiry, analytical procedures, or other procedures performed in a review. Additionally, a compilation does not contemplate obtaining an understanding of the entity's internal control; assessing fraud risk; testing accounting records by obtaining sufficient appropriate audit evident through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); or other procedures ordinarily performed in an audit.The letter continues:
Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts. However, we will inform the appropriate level of management of any material errors, and of any evidence or information that comes to our attention during the performance of our compilation procedure that fraud may have occurred.Here is Mr. Dreimiller's Letter of Engagement in its entirety.
Mr. Dreimiller's 2010 "compilation" was dated November 5, 2011 and included data from 2009 for comparison. Incidentally, Mr. Dreimiller is a former trustee of the New Hartford Public Library, and is currently the Financial Officer for the Town of New Hartford.
Two paragraphs in Mr. Dreimiller's 2010 Accountant's Compilation Report at the front of the compilation are:
"Management has elected to omit substantially all of the footnote disclosures required by accounting principles generally accepted int he United States of America. If the omitted footnote disclosures were included in the financial statements, they might influence the user's conclusions about the Organization's financial position, results of operations, and cash flows. Accordingly, these financial statements are not designed for those who are not informed about such matters.In a related matter, in June 2010, Mr. Anthony Dolan of the NYS Comptroller's office wrote to the library asking for the 2009 annual financial statement that is required by Town Law Section 30 to be filed each year. Library officers do not believe that they are required to file the report.
The supplementary information contained in the Schedules of Functional Expenses is presented for purposes of additional analysis and is not a required part of the basic financial statements. The supplementary information has been compiled from information that is the representation of management. We have not audited or reviewed the supplementary information and, accordingly, do not express an opinion or provide any assurance on such supplementary information."
Here is a copy of the 2010 Compilation Report.
Shortly after being named to the board, Trustee Edmund J. Wiatr, Jr. was named as a member of the Finance Committee with Earl Cunningham as Chair of the committee; however, to date, there has never been a Finance Committee meeting called by Mr. Cunningham.
As a Finance Committee member, Mr. Wiatr was concerned that he had heard nothing further regarding the status of the Comptroller's report. Trustee Wiatr emailed Mr. Dolan to find out if the report had been filed. Mr. Dolan replied in an email:
From: TDOLAN@osc.state.ny.us [mailto:TDOLAN@osc.state.ny.us]
Sent: Wednesday, April 11, 2012 1:45 PM
To: edmund j wiatr jr
Subject: RE: FAILURE TO REPORT - TOWN OF NEW HARTFORD PUBLIC LIBRARY
Mr. Wiatr, could you provide me contact information (i.e. business phone number and email address) for your current treasurer, Mr. Cunningham? Our office will reach out to him regarding the completion of the annual financial report.
In response to your inquiry, we do not show any record of the New Hartford Public Library ever filing an annual financial report (AUD) with our agency.
Funding of almost a million taxpayer dollars for any organization that has never sought an unqualified audit or complied with the NYS Comptroller's Office request for the required annual financial report (AUD) is outrageous!