March 17, 2022 |
The audit of the Town of Saratoga’s financial records for the year that ended June 30, 2020 was finally delivered this week.
The accounting firm, Fagnant, Lewis and Brinda of Lander prepared the report. A Certified Public Account with the firm, Tim Fixter, addressed the town council about the long-awaited audit in a Zoom meeting Tuesday evening. The audit covers 2019-2020, the time period when years of poor bookkeeping came to light. Fixter recalled that time in his presentation.
Pictured above: File photo of Saratoga Town Hall/Police Department. Photo by Cali O’Hare/Bigfoot 99.
No one was expecting a rosy audit from the fiscal year the report covers, and the town did not get one. The findings over the deficiencies of internal controls are significant, and indicate systemic failures years in the making.
The audit includes a qualified opinion, which government entities work to avoid. The findings focus on material weaknesses, including the lack of documentation over journal entries, credit cards, petty cash and notes payable. There’s no paper trail showing how money came in, went out or was transferred between various accounts.
The lack of documentation is the reason why it took nearly two years to produce an audit.
Questions raised in 2019 about how the books were maintained were met first with resistance and then reluctant acceptance of bringing in an outside accountant. Fixter noted that the recommendations made by the accountant, James Childress, were rejected. Fixter also said that no changes were made to tighten internal controls and the problems persisted.
The sloppiness abounded. For starters, no one knew how many credit cards were issued in the town’s name, what the limits were or how charges should be entered into the system—or if they were. Nearly half—18 of 40—disbursement samples were missing documentation. The audit also states that employee benefits policies were not followed, resulting in the payout of $44,000 more than policy allowed for accrued leave.
The biggest takeaway in the audit: Saratoga was broke on July 1, 2019. The report shows the town’s net position at the start of the fiscal year was $1.3 million in the red. However, undocumented transfers from enterprise accounts to the general fund hid the negative general fund balance at the time. Questions that were asked at the time about the town’s real financial position were met with hostility at town council meetings by then Mayor John Zeiger and the loyalists in his administration. Behind the scenes, attorneys were retained and lawsuits threatened.
The audit released this week validates the questions and suspicions that were raised in the fall of 2019. In the fallout from those continuing questions, Zeiger resigned mid-term. His hand-picked successor also abandoned ship a few months later. The town clerk at the center of the storm retired. The town attorney quit, as well.
The CPA who conducted the audit, Fixter, thanked the members of the current administration for their help in piecing together the puzzle of records to get as accurate a picture as possible.
Each of the deficient findings in the audit’s opinions are accompanied with a recommendation. The corrective tips include specific advice on establishing, protocols, controls and oversight in every area where the clerk and treasurer handle and track the public’s money.
The most noteworthy coaching advice from the CPA to avoid repeating the mistakes of the past is that accounting tasks, such as making ledger entries, should be done in an established “Town of Saratoga Way,” and not the way an individual employee thinks it should be done.
Fixter said the 2021 audit will look similar because the new administration was not able to make changes until after the financials were submitted. The CPA recommended moving forward as quickly as possible to finish the 2021 FY budget and then look to see the results of changes that have been established begin to show up in the 2022 audit—which is just three months away.
Related: Town of Saratoga’s 2020 audit may be nearing completion, will likely come with ‘adverse opinion’
Related: Accounting firm says poor record keeping will keep Saratoga from a clean audit
Related: Saratoga hires Lander auditing firm
