ROWE — An audit of the town’s finances for fiscal year 2024 revealed it has $32,000 unaccounted for due to record-keeping errors and $31,000 in possible budget deficits.
Last year, the town had an audit conducted for the 2022 and 2023 fiscal years, marking its first audit in eight years. The report showed that for FY23, the town had approximately $500,000 misrepresented, with expenses and fund transfers not properly recorded.
Tony Roselli, of Roselli, Clark & Associates, which was contracted to conduct the audit, said the firm was ultimately able to find the funds and balance the books for FY23, but an audit of the town’s finances for FY24 found the record-keeping errors had continued.
“At the end of the audit, even though we had to juggle some things and find some things, we found that the cash was in balance at the end of ’22 and ’23. At the time, I said it might be a good idea to do an audit for ’24, so that brings us to today,” Roselli told the Selectboard on Monday. “It wasn’t an optimistic report.”
Roselli told town officials that Rowe is in a good financial state, but operationally, the town needs to improve its recordkeeping, as the accountant and treasurer’s books do not match.
“What we found was that the piece that got put in by the treasurer was way off. It was close to what the general ledger balance was, so everything was signed off and turned in,” Roselli said. “When we came out and started looking at things, it was off by about $300,000.”
Rowe’s total operating budget for FY24, approved by Annual Town Meeting voters in 2023, came to more than $4.4 million.
Working with the treasurer and accountant, Roselli said he and his team were able to reconcile some of the numbers and found that more than $200,000 in receipts were duplicated. Payroll was also recorded incorrectly. They were able to narrow the gap in the unbalanced books to $32,000.
Roselli advised that the treasurer and accountant should meet monthly to review and reconcile the books, and ensure every expense is accounted for. These reconciliations did not occur as they should have, leading to the variance growing wider throughout the year.
When asked by the Selectboard if there was anything suspicious in the records, Roselli said he found nothing that indicated malicious intent in the finances. The records simply were not kept the way they should have been.
“When we came in, we found that really nothing had been done in the 12 months since we left,” Roselli said. “More sloppy recordkeeping than suspicious.”
He recommended the town write off the variance and hire a consultant to review and clean up the books for FY25, so when the town gets a new treasurer, it can start with a clean set of books. Treasurer Ben Gelb left his role in Rowe and currently works as treasurer for the towns of Plainfield and Cheshire. Angela Garrity serves as Rowe’s accountant.
“You can write it off, and if you write it off, you have to raise it on the tax recap, or you can conduct an investigation,” Roselli said. “Let’s get a clean slate, start fresh and draw a line in the sand.”
The tax recap is a yearly report sent to the state Department of Revenue for the town’s finances. The tax recap is necessary to set the tax rate and it impacts the town’s free cash amount. Any unresolved payments are added to the tax rate.
Roselli added that there was an additional $31,000 in deficits in the town’s special revenues accounts, and while these could be coding errors in the system, if they are “true deficits,” they would need to be included on the tax recap sheet as well.
Selectboard members said they would pay closer attention to the town’s finances. They plan to ask the treasurer and accountant for monthly updates on the balancing and reconciliation of expenses.
Vice Chair Marilyn Wilson expressed frustration with the situation, saying the town had similar bookkeeping problems in the past and had worked hard to fix them.
“This is like déjà vu. We had cleaned this all up. … You turn your back for a second and it collapses,” she said. “Common sense was not even used, never mind financial acumen.”
