"I'm not denying that I've made mistakes and that I've had a very bad year," Brimfield Treasurer Kirsten Weldon told the Board of Selectmen.
BRIMFIELD — In a brutally frank moment at Monday's Board of Selectmen meeting, an independent auditor faulted Treasurer Kirsten Weldon for mismanaging the town's payroll account and placing Brimfield in a precarious financial position.
"No offense to Kirsten, but I just feel that she stopped doing her job," Thomas J. Scanlon Jr., a managing partner of the South Deerfield accounting firm Scanlon and Associates, told the board.
Weldon, the town's longtime treasurer who was reelected to another three-year term last June, admitted her culpability in the fiscal mess. It remains unclear if further action might be taken against Weldon, who is also clerk of the Highway Department and executive assistant to the Planning Board.
Scanlon said Weldon's mismanagement led to late deposits, bounced checks and unbalanced accounts, among numerous other issues that jeopardized the town's fiscal health.
Weldon publicly acknowledged her shortcomings before the board and vowed to continue working with Scanlon to address the issues. "I'm not denying that I've made mistakes and that I've had a very bad year. There's a lot of reasons for that," she said.
Weldon's main duties include administering employee benefits and overseeing payroll and all town funds. But Scanlon's audit, which will be released in a report this spring, found numerous problems including delayed payments to town retirement accounts and overpayments to former town employees, among other discrepancies.
Over a period of months last year, payroll deposits had fallen short by about $55,000, according to Scanlon. The town was short in April, May and June 2012, but most of the missing deposits made it to the bank by Oct. 29. Three deposits totaling $2,500 are still missing, Scanlon said. "Someone fell asleep at the wheel," he added.
The auditor also found that no town departmental receipts were deposited from April to September last year. The issue has since been resolved, but Scanlon said he would continue to monitor things for the next few months to make sure all accounts are reconciled. "As it stands right now, all the departmental receipts going to the bank are caught up, right up to January," Scanlon said. "You're up to date.”
Scanlon said deposits should not be held up for several months, urging the town to make weekly deposits. "The aspect of holding deposits for six, seven months definitely doesn't have public confidence," he said.
Marie Arsenault, the town's accountant, said her job would be easier if Weldon were to make regular deposits, rather than hold onto receipts for an extended period. "I would like to see a deposit once a week ... rather than on the last day of the month," Arsenault told selectmen, who agreed with her.
Another issue identified by Scanlon involved deposits to town retirement accounts. His audit found outstanding checks for teacher retirement and deferred compensation accounts, he said. Selectmen Chairman Thomas Marino said the town needs to calculate the interest and potential earnings that were lost due to the delay.
Scanlon said the town also overpaid about $23,000 in health insurance to two former employees. "That's money that you need to get back," he said. "There needs to be a complete reconciliation of the health insurance account."
Marino said he's spoken with the town's attorney to see if the municipality is eligible for reimbursement by the Massachusetts Interlocal Insurance Association, which provides insurance to commonwealth cities and towns. The overpayments represent "a sizable chunk of money," Marino said.
The town's general ledger is still off by about $27,000, but Scanlon said he believes about $16,000 of that involves additional outstanding checks. However, the shortfall is preventing the town from having its free cash account certified by the state, which will penalize Brimfield for the discrepancy.
In general, the town's financial problems have left it more vulnerable to fraud and other issues, according to Scanlon. "We did have a significant fraud risk," he told selectmen. "You definitely had issues."
Brimfield's cash flow issues forced town officials to borrow $738,000 to close a fiscal gap and set its property tax rate for fiscal 2013. If the town had failed to set a tax rate before Dec. 31, tax bills would have been delayed, leading to substantial revenue shortfalls. The town mails the bills on a quarterly basis.
The audit being conducted by Scanlon is Brimfield's first since the June 2011 tornado, which prompted town officials to skip that year's audit. Scanlon said he expects to give selectmen a progress report in April before issuing his written report.