Limestone working to fix deficiencies found in audit

6 years ago

LIMESTONE, Maine — Certified Public Accountant Tim Poitras presented audit findings to the Limestone Select Board during a March 7 meeting, describing six issues that need attention.

He said the audit itself was “clean,’’ meaning that the financial statements were fairly presented in accordance with generally accepted accounting principles, but that there are “several findings” that need to be addressed.

Town officials have been working toward correcting these issues since they were found last year, and former Town Manager Matthew Pineo presented them to the board on Nov. 1 of 2017.

In total, there were two material weaknesses and four significant deficiencies. Auditors define a material weakness as a combination of deficiencies that could lead to a “material misstatement” of a town’s financial information. Significant deficiencies, on the other hand, are not as severe, but are still important enough to warrant an auditor’s attention.

According to Poitras, of the Chester M. Kearney tax and accounting firm, the two material weaknesses were a failure to reconcile bank accounts and that payroll was not being recorded.

The accountant told the board that bank reconciliations are “absolutely essential” for the town and that it should be “approved by a supervisor or board member.”

Selectperson Melissa Devoe asked Interim Town Manager Stacey Mahan if the town has made any progress on that issue. Mahan said town officials are “slowly, but surely” getting back on track with reconciliations and Board Chair Tom Albert told Poitras that this “will not happen again.”

For payroll, Poitras said it was his understanding that the issue began once the town started outsourcing payroll duties, and that since then it “wasn’t being posted to the expense ledger and also the bank account.”

The four significant deficiencies were: not recording payroll, having a large number of old taxes on the books that are not being collected, not completing monthly financial statements, and not recording the budget using the town’s TRIO software.

Poitras recommended that various town departments should be turning in their payroll information and that the town should implement an “approval step” in that process. As for outstanding taxes, Poitras said the bulk of it involved personal property taxes that the town likely would not collect.

Poitras said that several of the issues stem from town employees being unfamiliar with the TRIO program.

“TRIO is a good program for running a town, but the reconciliation procedures are not the easiest,” he said.

“I can attest to that,” said Mahan, adding that he would like to reach out to other towns to see if they would be willing to collectively pay for costs associated with TRIO training.

“The big expense is having them (trainers) come up and stay,” he said, “so maybe we could get other communities on board.”

Poitras said Mahan’s plan would be the ideal solution, adding that the software can be stressful and intimidating to those who are unfamiliar with it.

Devoe asked what would happen if these issues were not corrected by the end of the fiscal year.

“All I can do is write up another finding,” said Poitras. “If townspeople have concerns after that, then they’ll come to you and ask why we’re constantly getting findings.”

He concluded by telling the board that the audit itself is “clean,” and recommended the town make the necessary adjustments.

“You have a few months to get everything on track,” he said, “We’ll be back before you know it.”