Email to selectmen of Templeton - no response as of yet.

Reading the FY 2018 audit again, I find what I consider contradicting statements:

In planning and performing our audit of the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the Town of Templeton, Massachusetts, (the “Town”) as of and for the year ended June 30, 2018, in accordance with auditing standards generally accepted in the United States of America, we considered the Town’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control. 

4. Sewer User Charges (repeated from the prior year) The Sewer Department continues to handle all aspects of the user charges associated with the activity. Therefore, the internal controls surrounding this activity are not as complete as they should be. We continue to suggest that the Collector’s office be given the responsibility of collecting the user charges. This will provide better segregation and internal controls over the activity and provide a more efficient reconciliation process. 

"as they should be" and "we continue to suggest" - Those two statements are opinion based, no mention of any law being broken, no mention of any by-law being violated (I am still awaiting the explanation  of the chairman's statement that sewer dept. is violating town by-law (s).

Bottom line, it is all about the money; Selectmen Brooks asking if sewer enterprise fund can be billed and if so, will this help our general fund? (see selectmen meeting of April2, 2018) Reducing hours of benefited sewer employees will save health care costs. If you wish to save money, move collections to town hall @ collectors office and do not charge the enterprise fund to do this, I mean, people, including sewer rate payers, already pay taxes to operate the treasurer/collector office, including any assistants/part-time personnel.

Note: By not providing a return envelope, any resident now has to buy an envelope which in reality, amounts to another fee. Yes, that point might be considered petty, but as I stated, I am all in. How much tax money is going to be spent conferring with town counsel as you try to enforce an opinion from someone else; auditor and DOR?

from 2016; This message was at one time posted on Templeton Town face book page.

Message from Town Administrator Bob Markel

The Department of Revenue has always discouraged the use of free cash to balance the budget. Bond rating agencies do the same, and the low bond rating for the Town reflects, in part, the lavish use of free cash to fund the operating budget. However, this is not illegal; it is simply unsound financial policy.

The amount of free cash available changes yearly, and it is not predictable. Free cash is considered one-time revenue, and the Department of Revenues recommends that it used to augment the Stabilization Fund (reserves) or for one-time purchases like capital items.

Audit firms do not do a thorough job of auditing the books (unfortunately). They come and test various areas of the town’s finances to see if there are problems, but some problems are not caught and can persist for years. They tell you up front that they cannot do a thorough audit for the relatively modest amount they charge. The DOR representative at today’s meeting called the standard municipal audit a “hit and run” audit.Still, some firms are more reputable and more competent than others. I cannot name names in this message, but there are several firms that I would never hire.

Recommendation: The Selectboard should create an Audit Committee of knowledgeable citizens who will have two responsibilities: 1) Bid the audit contract every three years, and hire an independent auditor; and 2) Receive the annual audit and do a public review of the findings and the management letter. Municipal auditors are typically hired by the Town Administrator, Town Accountant or Finance Director. This is an inherent conflict of interest since town officials who do the hiring are the ones whose work is being audited. Hiring and receiving the audit should be an arm’s length transaction from the Town’s financial team.

The Department of Revenue oversees 351 cities and towns in the Commonwealth. They accept data provided by the Town Accountant, the Treasurer/Collector and the Assessors. They often question the data, but they are not always able to verify if data submitted on the Tax Recap or Schedule A are accurate. The DOR does not have access to the town’s accounting system. For example, the DOR was in Templeton today to question whether the Town has properly reported debt obligations on the DE-1 section of Schedule A. Some debt is paid from general revenue within the town budget and some debt is paid through debt exclusion. There is a correct way to report these two types of debt on Schedule A. The DOR representatives checked to see if the Town reported the data correctly, but they are limited in their ability to verify the accuracy of the data.

The long term solution to Templeton’s financial problems is to hire a professional Town Administrator who will put in place a competent financial management team – Accountant, Treasurer, Collector and Assessors. The Selectmen and Advisory Board have the responsibly to oversee the T.A. and the financial team on their management of the Town’s finances. To complement the BoS and Advisory Board, the Audit Committee should retain a reputable accounting firm to conduct an annual audit with the results made public.

Bob Markel
Interim Town Administrator