STOCKBRIDGE — The town has a clean financial bill of health, with one caveat, according to the annual audit presented recently to a joint meeting of the Select Board and Finance Committee.
Cash on hand totals just over $11.4 million, said auditor David Irwin of Adelson & Co., with $900,000 of bills still to be collected, including a number of delayed real estate tax payments slightly above the previous year because of the coronavirus pandemic.
“The town has always done a very good job collecting its taxes,” he said, pointing to 95 percent of real estate bills paid, and “high 90s” for motor vehicle excise and personal property tax payments.
Irwin cited nearly $45.5 million in town-held capital assets, before nearly $2.4 million in spending on major projects, including the highway garage replacement, bridge projects, the Town Offices drainage improvements, as well as equipment and vehicle purchases.
He also praised the town’s 87 percent funding of its liability for post-retirement health benefits (OPEB) to municipal employees, with $2.9 million available in a trust fund toward a total liability of $3.4 million.
“In my opinion, the town has done a fantastic job of funding that true liability by maintaining an aggressive contribution schedule,” Irwin said.
“It’s fair to say most towns and municipalities do not fund for OPEB,” Finance Committee Chairman Jay Bikofsky commented. “You guys are the most aggressive in actually taking the liability very seriously, so, that’s very good to see,” Irwin agreed.
With total liabilities, including long-term debt, of $16.6 million, the town’s net total of assets is $28 million.
“The numbers are fine,” Irwin concluded.
The only negative in his report was a finding that the town did not comply with proper procurement requirements for multiple capital projects during the 2020 fiscal year.
Although there was no problem with bidding on projects, the notifications for scheduled bids only appeared in local publications, instead of also being posted on the state’s central registry system, as required.
But, Town Administrator Michael Canales “did the right thing” by contacting the state and setting things right, Irwin stated.
“Internal controls should be strengthened and additional education needs to be learned by some of the departments that procure assets,” he said, and a checklist is necessary to avoid a recurrence of the problem.
“We were fine with the responses” by Canales and town accountant Ray Ellsworth, Irwin stressed. “I’m pretty confident we’ll find a different story when we come in and audit the 2021 fiscal year. That was really the big issue.” Ellsworth is retiring as of May 1.
The Pittsfield audit firm’s management letter suggests strengthening internal controls, such as electronic tracking, on some of the town’s credit cards.
It also recommends that the town should use licensed architects or engineers for construction projects to make on-site observations, certify the quality of the work and ensure payment to the contractor, instead of relying on Town Offices staff, as occurred only during fiscal year 2020.
“The procurement issue has dogged us for a couple of years,” Finance Committee member Stephen Shatz acknowledged. “But, it’s clearly under the control of a highly competent town administrator and town accountant. I’m certainly confident that we’re not going to see this criticism in a management letter again.”
“We have an outstanding town administrator, town accountant and treasurer, and things have worked extremely well,” Bikofsky added. “We’re able to get information quickly and to the point to satisfy the needs of the auditor and the authorities.”
The Select Board and the Finance Committee voted to endorse the audit.
In a response added to the audit, Canales cited the town’s new policy and procurement document that took effect in January. All purchases exceeding $10,000 must be approved by the town department involved, by the town administrator as chief procurement officer, and by the town accountant for the availability of money before the purchase.
Canales is meeting with department heads to identify procedures, planned purchases and their estimated values. That will determine which purchases and contracts are subject to procurement, he explained.
In addition, the purchase data form and all supporting documents will be maintained by department heads, the town administrator and town accountant. All quotes for purchases of goods and services in excess of $10,000 will be in writing.
The town accountant will prepare quarterly a list of vendors providing more than $10,000 in goods and/or services during the fiscal year to the town administrator, who will conduct an annual review of procurement with department heads.