HATFIELD — Continued problems with Hatfield’s financial practices, identified in a recent audit, and a large deficit in the fiscal 2017 books, are causing a delay in issuing quarterly tax bills until a special Town Meeting is held next week.
At a joint meeting Wednesday, members of the Select Board and Finance Committee said a $305,000 deficit, as calculated by the state’s Department of Revenue, must be erased before the tax rate can be established.
“Until that $305,000 deficit is gone, we cannot set a tax rate for the town of Hatfield,” Select Board Chairman Brian Moriarty said at the meeting.
The fiscal 2017 accounts, for the year that ended June 30, must be closed out before the final tax bills for fiscal 2018, which began July 1, are sent to property owners.
The plan to reconcile the books will be taken up at the special meeting, which convenes Wednesday at 7 p.m. in the Smith Academy cafeteria. It includes transferring $218,582 from the Town Hall and municipal stabilization accounts, which between them have around $400,000, to the fiscal year 2017 budget, making around $50,000 in reductions in department budgets in fiscal year 2018, and making adjustments to other spending.
While the approach being used means depleting so-called rainy day funds, it was made necessary after state officials informed Hatfield that short-term borrowing is not allowed to cover such deficits.
What is happening is troubling to some observers, like Christopher Smith, a former Hatfield assessor.
“Our financial house is a wreck,” Smith said Thursday.
The audit report from certified public accountants Roselli, Clark & Associates, of Woburn, cites pre-existing problems that were included in reports issued in 2013 and 2015.
An overview in its nine-page management letter begins: “The town continues to struggle to address the issues that have plagued it for at least the last decade as many aspects of the financial operations continue to operate at an unacceptable level.”
Among problems are that bank reconciliations between the collector’s office and accountant’s office are not being done in a timely fashion, ledgers are being misbooked, cash books do not have proper entries and both offices are overwhelmed by their workloads.
Issues are continuing even though fiscal 2017 was the beginning of the second year with a new financial team in place, with Laura Lee Bertram serving as the elected collector and treasurer, and Derek Geser the appointed accountant.
“We expect to report these same conditions for fiscal year 2017 and there is also a risk that if this is not brought under control very quickly the accuracy and efficiency of producing the 2018 records will also be at risk,” the accountants’ report notes.
The report identifies issues that have continued to plague the financial offices in Hatfield, including not implementing measures to mitigate fraud, not developing a framework for a formal policy and procedure manual, not improving how purchasing and cash are handled and not having an investment policy.
“The town should consider adding additional resources to this office so the treasurer/ collector can focus on increasing her efficiency with respect to the reconciling and reporting aspects of the job that are currently deficient,” the report notes. “If this aspect of the job could be improved it would certainly be a huge benefit to the town’s financial recordkeeping.”
Moriarty said additional resources have been provided to the collector and treasurer’s office, including working with a private consultant, Baystate Municipal Accounting Group of Maynard, with the aim of catching up.
“We realize there are issues. We are trying to address them, and put out fires at the same time,” Moriarty said.
Town Administrator Marlene Michonsky acknowledged at the meeting that the audit report is accurate and the problems need to be corrected. “It really is all about how we’re reporting our operations — it’s not being done correctly,” Michonsky said.
But Smith said he and others are worried that Hatfield has had sufficient time to fix the problems and that failure to do so indicates a leadership vacuum. “There’s no plan to hold anyone accountable,” Smith said.
Moriarty, Michonsky and Finance Committee Chairman Darryl Williams plan to meet with state revenue officials Tuesday.
Scott Merzbach can be reached at smerzbach@gazettenet.com
