2023 Templeton annual town meeting.
Article 1 - payment of late bills from FY22.
The article proposes paying these bills by using so called free cash.
Bills are for $249.00 for senior services and $250.00 for insurance & benefits.
First off, this is using one time funds to back up a town budget, which goes against the town financial management policy, but the bills need to get paid. This happens, but there is a process where money can be set aside before the fiscal year (FY) ends, it is called encumbrances.
What is an Encumbrance?
An encumbrance is a restriction placed on the use of funds. The concept is most commonly used in governmental accounting, where encumbrances are used to ensure that there will be sufficient cash available to pay for specific obligations.
Town accountant generally sends out email to town departments when the end of FY is approaching, June 30 of any calendar year, to notify accountant if they have purchased items or service but have not yet received an invoice so bill can be paid. When departments fail to do this, you get these late bills. This article allows those bills to be paid.
My opinion on this is someone should be held accountable, which is why I believe the approach should be a department with a late bill, that bill should be paid out of the next FYs budget, so they have to deal with a consequence of failure to follow best practice. When the months of May and June are upon us, the town administrator should be "driving" this point home at weekly department head meetings; "check you budgets and spending." Also, how do we go almost an entire new fiscal year before discovering we have unpaid bills from previous fiscal year?
ReplyDeleteJeff Concern is my concern with this Article. I'm concerned that its been an entire year and we have unpaid bills. These bills are usually taken care of during the FTM. Now the method to take care of these bills has not been cleaned and the method to handle them has not been established or followed. This issue has been brought up over and over yet nothing ever changes because it's always, we need to pay the bills.
ReplyDeleteBelow is from QTR reports
Prior year encumbrances fy 21- $706.90
Prior year encumbrances FY 22- $328.19
I'm personally voting NO as it's time consequences are attached to not listening to taxpayers.
Looks to me that the uncertified town accountant is not doing her job
ReplyDeleteI agree that bills should be paid and held against the next fiscal year budget for that department. Stop holding onto bills having the expectation of getting additional funds approved because you have no policies established. Get policy established and get the departments to put thru bills according to that policy.
ReplyDelete