Budget deficit questions continue (Printed April 18, 2008)
By Cliff White
Staff Writer
Auditor Ron Smith of RHR Smith and Co. appeared before the Buxton Board of Selectmen April 9 and fielded a number of questions from residents curious to know more details about the department’s $30,000 revenue deficit.
The deficit appears in the town’s audit report in the recreation activities account, also known as the enterprise fund – one of three recreation department accounts. The fund has lost money in each of the last three years and has a listed deficit of $86,209, according to the report.
“Overall, when you take the three accounts combined, they are in the black,” Smith said. “No doubt as outsiders looking in, it appears as if some programs are not operating at break even. We are looking to identify what those programs are. Very clearly we have some concerns with the record-keeping.”
Smith expressed his confidence in the soundness of recreation department finances.
“As far as the numbers go, I don’t see anything that would cause me to look you in the face and say, ‘Yeah, there’s a problem here,’” Smith said. “What I do see is concerns over practices on how you bill, what you bill, who you bill and how those pieces of paper are getting into the accounting office.”
Smith said the largest problem with the finances is accounts receivable debt.
“We sat down and worked with [recreation director] Chris [Barstow] to identify the accounts receivable that were to be collected either for past programs services rendered or current program services,” Smith said. “We have added either a 15 or 20 percent allowance for uncollectible accounts through June 30, 2007. We looked at the hard numbers that came in after July 1 and we were comfortable with $30,000 of accounts receivable.”
Smith said he was satisfied with the number, but it could increase.
“We felt pretty comfortable with the allowance we made,” Smith said. “Will we come back to you and say that number could have been 25 to 30 percent come June 30, 2008? Maybe.”
The majority of questions came from budget committee member Lawrence Miller. He asked Smith if he was aware that the recreation director has doubts about collectability of accounts receivable.
“Absolutely – there weren’t even completed addresses on some of the accounts,” Smith said. “That’s why I say we’ve talked a lot about policy and procedural changes and that really is the thing we’re concerned about. So yes, I think Chris [Barstow] was aware some of those bills weren’t going to be collected – as we were aware, which is why we booked that allowance.”
Miller asked Smith if the auditors were satisfied with the audit’s results’ integrity.
“Simply put, we haven’t satisfied ourselves,” Smith said. “We think there are fundamental issues that need improvement, some procedural changes that need to take place.”
Selectman Chairman Jean Harmon said it appeared as if the collections problem was caused by people enrolling in classes and then not paying the bill.
“I know oftentimes people enroll in programs on a weekly or monthly basis and a flexible number of kids attend. I use this only as an example, but it may be that parents don’t pay Friday afternoon as they’re supposed to, and therefore it then becomes a receivable,” Harmon said.
Harmon said she would defer providing further detail to Barstow, who she said was unable to attend the meeting due to commitments in Augusta. Barstow is a member of the State House of Representatives representing Gorham.
Asked about how large a factor Buxton Community Day debts were, Smith said he wasn’t sure but would check into the matter and have a better idea in two weeks.
“It’s clearly not profitable and there is concern that some of that cost could be passed on to the taxpayer,” Smith said.
Smith said the recreation accounts overall are getting closer toward going into debt.
“It won’t take much this year to put it over that debt line,” Smith said. “Our job now is we’re going to make sure we understand how we got here, identify the problems and hopefully eliminate them.”
If the recreation department as a whole does go into debt, Smith said, the proper protocol would be to have taxpayer discuss the issue at a special town meeting.
“But we’re not in debt and I don’t see it as an issue,” Selectman Cliff Emery said. “Until we think we’re even going to get to that point, I don’t think we have to deal with it.”
“There needs to be better accountability, there needs to be better policy and procedure, and better internal monitoring of programs to see what is working and what isn’t. But overall, I think the town is running a good program for the kids here in Buxton,” Smith said.
"So we don't need a Town Manager in Buxton...?"
To the editor,
“There needs to be better accountability, there needs to be better policy and procedure, and better internal monitoring of programs to see what is working and what isn’t."
Auditor Ron Smith's second to last statement in this article sums up perfectly the need for a town manager in the Town of Buxton.
A few weeks ago I submitted a letter voicing my support of the petition circulating in town, started by Mr. Andy Townsend, to hire a town manager and how doing so would streamline the town's financial system and improve efficiency. The current financial situation in the town's recreation dept. would not have happened if Buxton had a town manager.
It is common practice within town governments to move monies from one budget line to another to cover over expenditures as long as at the end of the year, the department finishes in the black. Things happen during the year that are unforeseen and you have to be flexible. And sometimes, due to a mistake or underestimating, a department does go over and that department head must explain why at a special town meeting. And hopefully he would have a good answer. But to have over expenditures due to sloppy billing and accounting practices is inexcusable. And a town manager would not allow that to happen. A manager would have the time to spend reviewing account status and if a program was not sustaining itself, he/she would be able to fix it or shut it down.
To paraphrase select woman Pulsoni from a few weeks ago, "These are tough economic times". But apparently the times are not tough enough yet in the rec department to ensure that the bills were sent out and to pursue collection on outstanding invoices, to the tune of $30,000 dollars. Isn't that what the rec directors position salary is? In theory, the department isn't taking in enough money to that. Apparently, the recreation director is applying the practices he learned at his other career as a representative in the Maine Legislature of "have the program now and pay for it later" school of thought.
A good town manager would demand that any program that any department head wanted to pursue be presented with a serious need, cost benefit analysis, and a way to financially support the program through the most cost effective means. And if the program is approved, he would have the time to follow up on the program, and its status, thereby giving the taxpayer the most for their tax dollars and good quality assurance.
Please support Mr. Andrew Townsend's petition to allow a vote on a full time town manager. There are petition are at most of the town stores or you can contact him directly at his published phone number.
Jeff Grinnell
Buxton Maine
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