BALLSTON SPA -- The village's former treasurer, Christopher Hickey, for years failed to file mandatory financial reports and village leaders failed to remedy the situation, according to an audit released Wednesday by the Office of the State Comptroller.
The state’s findings, which led to Hickey’s resignation last month, were made public Wednesday. The audit report also noted the Comptroller’s Office raised concerns with the completeness and reliability of Hickey’s financial records in both 2006 and 2012.
“Although corrective action plans were developed, based on the current state of the accounting records, officials did not take adequate action,” auditors wrote.
The latest audit pointed out Mayor John Romano and a pair of Village Board members held their current offices at the time of the prior audits -- audits that raised issues with how Hickey handled the village’s finances.
And the village’s financial situation has deteriorated in recent years. In the spring, the Village Board enacted a 17-percent property tax hike. It originally proposed a 25-percent increase, but secured a $600,000 loan to cover expenses. The prior year, the village borrowed about $390,000 to cover operating expenses.
“Given the village’s weakening financial condition, it is even more important for the board to have useful financial information,” auditors wrote. “However, even after repeated audits alerting the board to significant problems with the accounting records, the board has failed to resolve this problem.”
The audit also highlighted the villages depleted general fund, which has seen its balance slip from more than $213,000 at the end of the 2014 fiscal year to just over $30,000 this year. The general fund experienced three straight years of unplanned deficits, ranging from more than $18,000 to more than $124,000.
Auditors found Hickey did not utilize the village’s accounting software and did not properly record transactions when checks were issued or receipts were received. Hickey also failed, for the past four years, to file mandatory annual financial reports with the Comptroller’s Office.
Hickey told auditors that, while he attended training for his position from 2005 to 2012, he stopped attending because “he was not getting anything out of it,” according to the audit.
“The treasurer has not filed the required annual financial report … failing to meet his responsibility as [chief financial officer] ensuring that all money and financial activities are accurately accounted for in a timely manner,” the auditors wrote.
The report stated that the Village Board did not ensure Hickey filed the required reports and did not make him attend board meetings “as a measure of accountability.”
“Without reliable financial records and reports, there is a risk that cash flow problems have been concealed and the board's ability to manage the village’s financial condition and make sound financial decisions is limited,” the audit states.
The audit also called into question the utility of a deputy treasurer position, which had been created to oversee and improve the village's finances. But the deputy, who also resigned last month, generally responded to requests from the mayor and provided verbal reports, which did not fix the financial reporting problems, according to the audit.
In conclusion, auditors recommended village officials ensure the treasurer’s records are complete and accurate, require timely completion of annual reports, monitor monthly financial reports, complete annual internal audits and develop multi-year financial plans among other actions.
In a written response last month included in the audit report, Romano wrote that the village “will implement the recommendations” in the audit and submit a corrective action plan within 90 days.
On Wednesday, Romano said he takes full responsibility for the village's finances and said he was looking for ways to improve the situation. Town officials are in the process of hiring a new treasurer, who will be required to attend board meetings and undergo training recommended by the Comptroller's Office, Romano said. He said the village is looking to outsource its payroll processing in an effort to free up more time for the treasurer to focus on other village finances.
He said he addressed the audit and the village's efforts to improve its financial situation during a public board meeting Tuesday night.
The village is also considering contracting with an outside accountant to get the village caught up on the financial reports the former treasurer failed to file. He also said a citizens budget committee has been established and will provide recommendations to village officials as the budget is developed over the coming months.
"We are not going to look back; we are going to look forward," Romano said. "At the end of the day, as the chief executive officer, I'm the one who is ultimately the point person. I take responsibility for things that were contained in the audit."