Tardy financial statements come at a tangible cost to taxpayers
To the Editor:
Pound Ridge’s serial financial statement delinquency should concern taxpayers. The town recently released audited financial statements for 2022. While 2-year-old financials are better than 3-year-old financials, they and the related regulatory filings hardly qualify as being current. New York law requires filing an annual financial report with the Comptroller’s Office within 90 days after year end.
Tardy financial statements come with a tangible cost, as the 2022 report revealed a $78,340 auditor’s fee or twice the $39,500 budget (Page 65). The report also disclosed 5.02 percent interest we pay on the $3.5 million bond anticipation note and 6.34 percent we were paying before the last rollover (Page 53). With municipal rates 2-3 percent lower, it’s hard not to see those high rates as another tangible cost. The 2022 report also provided more information on the Transportation Enhancement Project (TEP). Turns out TEP cost $451,959 more than expected and that overrun was absorbed by taxpayers, making our net cost 122 percent higher ($821,959 actual net cost vs $370,000 expected net cost; actual net cost based on $2,227,959 expenditures less $1,406,000 grants as disclosed by town in FOIL). To add cash flow insult to project cost injury we didn’t receive $1.2 million in grants until three years after we spent it.
If past is prologue and the proposed water district project is managed like TEP, it will be a $1.2 million cost overrun with a 36 percent higher net cost. The cash flow ramifications would be dire, as we don’t have the capability to bridge $6.5 million for three years. The auditor’s 2022 letter to management cited 13 control deficiencies in accounting practices (Pages 11-18 of attached 2022 letter to management). Each is a serious lapse, yet almost all have been in the last four management letters. Particularly concerning are repeated deficiencies in tracking capital projects and special purpose funds. This board should straighten out its financial reporting mess and provide timely and accurate financial information to taxpayers.
John D. McCown Pound Ridge