14 Nov 2012
The Cohasset Board of Selectmen unanimously approved this press release on Tuesday, November 13, 2012.
Two weeks ago the Massachusetts Department of Revenue certified Cohasset’s free cash as of June 30. The free cash is $958,000, a sharp turnaround from the $600,000 appropriations deficit the finance department was forecasting during the winter. While having free cash certified is important for many reasons including building our reserves up to municipal standards, there is a broader story here that bears telling.
Two years ago we first started receiving information that our financial systems had deteriorated badly. By the spring of 2011 the Board of Selectmen learned that our auditor had been writing very explicit letters warning about shortcomings in the finance department including chronic understaffing and antiquated, inefficient accounting software. As a result our books had become chaotic and unreliable. These letters had not been forwarded to the board until Acting Town Manager Stephen Lombard unearthed them for us.
Over the past two years we have devoted substantial resources to cleaning up the books. Due to the hard work of Eric Kinsherf, John Stanbrooke, Daniel Sullivan, and, since February, Mary Gallagher as well as the full staff of the Finance Department, the records are current and our accounts are fully reconciled. We have also implemented a new accounting software system on an integrated, town wide basis. We now have the tools in place for management and boards to monitor the town’s financial affairs
In 2011 during the height of the crisis, we were unable to submit our free cash to the Department of Revenue until the deadline in late December. The submission actually took place at 3:30 AM and required many long nights by Kinsherf, Sullivan and the staff.
This year we submitted the free cash worksheets on October 16, 2012, all our accounts have been reconciled, and the Finance Department has been releasing timely and accurate financials to the Board of Selectmen and the financial committees on a regular monthly basis. The Board is now performing a monthly financial review with members of the Finance Department, the Advisory Committee and the Capital Budget Committee.
During this crisis, Mary Quill and her colleagues in the Assessors Office continued their very effective work and Jane Lepardo, our new Treasurer/Collector, has improved the functioning of her department.
Other important steps have been the adoption of a statement on financial practices aimed at bringing our credit rating up to AAA and a disciplined budget process prepared by the Governance Committee and approved by the Board of Selectmen. This process will be used during the current budget cycle which is now underway. On Wednesday, the Department of Revenue began a study of Cohasset’s financial and management practices at our request and our new audit firm, Powers and Sullivan, began the annual audit.
For the first time in two years the board can report that our crucial financial systems are strong and we have a stable basis for moving forward. We still have problems, including large unfunded retiree health care benefits (OPEB), but we can begin to work on them from a position of strength.