Maine
Auditor blasts leaders of tiny Maine plantation for mishandling public money
An unbiased auditor referred to as out elected officers of a tiny Maine municipality for violating the general public belief by not following correct procedures for dealing with taxpayer cash.
An accountant who carried out The Forks Plantation’s annual audit for 2021 stopped wanting saying its management was committing fraud, however described a number of uncommon practices in a letter filed with a report back to the state.
Essentially the most questionable motion was the second assessor, who can also be the tax collector, issuing a test to herself with out board approval, after which shortly thereafter paying her again taxes that have been an analogous quantity, in accordance with Keel J. Hood, a licensed public accountant based mostly in Fairfield. City officers made deposits with out documenting them and recorded funds that by no means occurred, Hood stated in his report.
The July 14 doc — referred to as a disclaimer of opinion — represents a uncommon rebuke of elected officers on this distant plantation of 48 individuals in central Somerset County, and caught the eye of the state auditor’s workplace.
“Disclaimers of opinion are vanishingly uncommon,” Maine State Auditor Matthew Dunlap stated. “We’re not alleging any criminality. Neither is the auditor, however he means that there may very well be potentialities of it based mostly on the dearth of controls.”
The plantation differs from cities and cities in that it’s ruled by a Board of Assessors, which has three elected members. Municipalities in Maine have been required since 1937 to carry out annual audits, that are snapshots of public funds to make sure officers are responsibly managing cash and to safeguard in opposition to fraud.
Hood declined to remark and directed inquiries to assessors, who didn’t reply to messages. However in an Aug. 11 letter responding to the audit, they argued with a number of of Hood’s key factors, in some circumstances denying any wrongdoing.
Through the fiscal yr ending June 30, 2021, the plantation’s second assessor and treasurer processed and cashed funds to themselves with out approval from assessors, a apply that continued even after he knowledgeable the board of the right process, he stated within the letter.
The second assessor and tax collector — who’s listed as Judith Hutchinson on The Forks web site, although not named in Hood’s report besides by title — cashed a $2,254.92 test, written in September 2020, that was not accepted by assessors earlier than or after it was issued, he stated. She had unpaid 2019 and 2020 property taxes totaling $2,237.91, which have been paid in October 2020, in accordance with the letter.
“Fraud is troublesome to detect, practically impossibly so within the case Administration colludes to hide it,” he stated. “The Board of Assessors’ failure to appropriately scrutinize these transactions is a sign that fraud might go undetected.”
Hutchinson failed to position a lien on her personal property for the 2019 tax yr, Hood stated, which is the accountability of a tax collector. Then assortment of the delinquent property taxes, curiosity and charges are alleged to be turned over to the treasurer.
Assembly minutes didn’t present that the assessors had given their approval to not place liens on Hutchinson’s property, he stated. Assessors, in a response to Hood on Aug. 11, argued they have been conscious of and accepted to not file the tax lien, however in a later change admitted they by no means formally voted.
Hutchinson paid again $15,742 to the plantation for prior years’ overpayments to her, plus the $2,254.92, circumventing the penalty charges and prices related to liens, Hood stated.
“The one financial institution assertion web page lacking from the [The Forks’] 12 months’ financial institution statements was the web page containing the photocopy of this test,” he stated, noting the plantation, by cellphone, needed to request a duplicate from the financial institution to point out to whom it was made out, and there was no file indicating the cost’s objective.
Hood advisable that the treasurer not signal checks with out board approval, in accordance with state regulation. He prompt that the plantation require its tax collector to file liens for all unpaid taxes, and there must be no exception for officers.
Assessors agreed with the 2 suggestions of their Aug. 11 letter.
It has been the board’s apply to position checks on a warrant and approve them, assessors stated, however they acknowledged the wrong sequence and stated they’ve ended that apply. When the plantation’s newly elected treasurer began in October 2021, assessors applied new management insurance policies that they imagine deal with the deficiencies famous in Hood’s letter, they stated.
Hood’s letter additionally detailed how administration tried to manage his entry to individuals he wanted to do his audit. Administration insisted that Hood solely work with the prior treasurer and that an assessor be current always, he stated. Hutchinson wrote that communications ought to undergo her and the primary assessor, he stated.
The assessors, of their Aug. 11 letter, denied that they restricted Hood’s inquiry to assembly solely with the previous treasurer and inspired him to interview the previous treasurer as a result of that’s who served in the course of the fiscal yr. Hood refused, they stated, which they seen as inconsistent together with his obligation to the plantation.
“At two factors, [Hood’s] letter refers to ‘fraud’ with respect to the issuance of checks earlier than putting them on a warrant,” assessors stated. “The board rejects any implication of wrongdoing.”
What unfolds subsequent in The Forks shall be between the city’s elected officers and residents, Dunlap stated, and his workplace doesn’t have the authority to do something greater than request info.
“For me, it will definitely elevate pressing questions if I used to be a citizen of that city,” he stated.
In a letter dated Oct. 13, Melissa Perkins, performing state auditor on the time, wrote to the plantation’s lawyer looking for a evaluate of The Forks’ accounting procedures, description of monetary controls and any plans for corrective motion adopted in the course of the fiscal yr.
Timothy Woodcock of Eaton Peabody in Bangor, who represents The Forks Plantation, responded on Oct. 17 that assessors would rent one other accountant — RHR Smith & Firm — for an expert analysis. Assessors made the choice after Hood failed to offer the plantation the clarification they sought, he stated Thursday.
The accounting agency will evaluate the June 30, 2021, audit and supply suggestions to assessors, which must be accomplished by Jan. 31, 2023. Assessors must settle for the findings and set up controls if RHR finds that there are points. RHR additionally will do the 2022 audit.
Dunlap, who was reappointed as state auditor in November, wrote again to Woodcock on Nov. 22, highlighting that Hood’s inconclusive audit is extremely uncommon.
Dunlap stated his workplace was not requesting one other audit or skilled exterior evaluate, nor was it involved with a disagreement between the plantation and auditor. He has not heard again from the plantation or its lawyer since that final change, he stated this week.