Auditor says Lenox has corrected bookkeeping ‘deficiencies'


LENOX -- Fifteen months after delivering a stinging rebuke to town leaders by citing "significant deficiencies" in internal bookkeeping, a review by municipal auditor Thomas J. Scanlon gives high marks for fixing the situation.

In a presentation to Selectmen on Wednesday night, Scanlon -- whose firm audits 85 cities and towns across the state -- offered warm praise for Town Manager Gregory Federspiel, who had taken "the buck stops here" responsibility for the problems, and for Charlie Browne, the new town accountant.

It was a far cry from a March 2012 meeting, when Scanlon took leaders to the woodshed because of bookkeeping problems. At that time, Scanlon's audit flagged six-month delays in reconciling balances in town-account ledgers during the 2010-11 fiscal year. No funds were missing or misused, he emphasized.

The newly released annual report, with just a few minor concerns, came as a welcome parting gift for Federspiel, who concludes nearly 14 years in the top job at Town Hall on Friday, and for Browne.

The town received an "A" grade on its basic financial statements, said Scanlon, who offered congratulations as he reported the town has $2.8 million in certified "free cash," also known as a rainy day fund. The black ink stemmed from $480,000 in unspent appropriations and $875,000 in revenue that exceeded the town manager's projections.

Much of the unexpected revenue came from the town's cut of the state lodging and meals taxes, which add up to 11.25 percent in Lenox. The total included $1.4 million in "free cash" still in the kitty from previous years.

"You're in good shape overall on your finances," Scanlon said. "That is a credit to good management, from the top all the way down, because I have plenty of towns that are not in that category."

In a separate management report, Scanlon found that the previous year's "significant deficiency in maintaining your ledger and balancing key items" had been corrected.

"Going forward, I believe you're going in the right direction," he stated. "That speaks a lot for good management. You're not out of the woods yet, from an auditor's perspective, but you have the proper people, procedures and understandings in place for what needs to get done."

The auditor also commended the town for opening a trust fund, currently at $100,000, for payment of promised health benefits to future municipal retirees. "You're a trend-setter, and one of the few communities, about a dozen, that are actually funding their trust," said Scanlon. "You should be congratulated on that."

He listed some "fine tuning," a few minor procedural improvements already under way to maximize efficiency, that would lead to a perfect audit score.

Scanlon, the managing partner of Scanlon & Associates based in South Deerfield, explained that the audit under discussion covering the 2011-12 fiscal year normally would have been issued last fall but was delayed because of the transition in the town accountant's office.

Select Board Chairman David Roche, welcoming the upbeat findings, credited Browne, the town accountant, for having made "terrific strides," working with Federspiel and the town's finance committee. "We're well on our way to being where we should be," said Roche, who emphasized how the "tourist tax" on rooms and meals "is helping fund this town and its activities."

Scanlon agreed, noting that only two or three of the other communities he audits are able to use the tax to their benefit. According to the Massachusetts Municipal Association, only Provincetown, Wellfleet and Nantucket collect more "tourist tax" than Lenox, based on their population.

Wishing Federspiel good luck, Scanlon triggered laughter when he said: "Unfortunately, I've met a lot of clowns out there and Greg is not one of them." Federspiel is moving on to become town administrator of Manchester-by-the-Sea on the North Shore.

To contact Clarence Fanto: or (413) 637-2551.
On Twitter: @BE_cfanto.


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