A SPECIAL JOINT MEETING was held by the City Council & WPC Authority and the Board of Finance in the City Hall Auditorium on Monday, August 3, 2015.
Those in attendance included Mayor Elinor Carbone, Corporation Counsel Raymond Rigat, City Councilors Anne Ruwet, Paul Cavagnero, Gregg Cogswell, and Christopher Anderson and members of the Board of Finance Bill Lamoin, Mark Bushka, Tom Scoville and Frank Rubino. City Councilors Drake Waldron and Paul Samele were absent, as well as Board of Finance members Laurene Pesce and Joshua Ferreira. Comptroller Alice Proulx was also present.
Mayor Carbone opened the meeting at 6:32 p.m. starting with the Pledge of Allegiance.
FORENSIC AUDIT: Protected Harbor/Brd. of Educ. Contract
Mayor Carbone opened the discussion with an explanation of her desire to initiate a forensic audit of the Board of Education’s contract with the Protected Harbor I.T. Services. She said questions and concerns have been raised over the prepayment of a contract a year in advance during a fiscal year prior to the contract period, monthly payments that were made in that same contract period, a lack of invoices, and billing practices that have raised questions in her mind. Mayor Carbone said she wants to ensure our taxpayer dollars are well spent and closely monitored and she wants to be confident that the City is getting what it pays for. She said that a refund of the $115,000 overpayment could not go to the Board of Education and would have to go to the City. The Board of Education feels that will not benefit their
needs, she said.
Mayor Carbone recommended that the City initiate an RFP immediately, having a scope of services to include a forensic review of the contracts, the proposed MOU, any and all invoices, purchase orders, checks, transfers to Protected Harbor, and bidding processes. She said she would like a turnaround time of about 60 days for completion of this forensic audit.
The Mayor explained that this is a separate audit from the previously discussed one, as an audit of a $72,000,000 budget will be costly and time consuming. Councilor Cavagnero said the auditor would have to be an independent one. Mayor Carbone said it would have to be put out to bid and a scope of services developed.
Councilor Cavagnero expressed his support.
Mayor Carbone explained that her research regarding an independent audit of the Board of Education indicates it is an astronomical undertaking. She recommended a more focused review or audit of those risk areas that could be identified by a proposed committee including a member of City Council, Board of Finance, Board of Education, City Finance Staff, Board of Education Finance Staff, and the Mayor. The committee would identify risk areas and narrow down the scope of the audit, determine the funding source, and initiate an RFP. Councilor Cavagnero recommended the Chairperson of the Board of Education Budget Committee be included.
Mr. Rubino voiced his opposition to the high cost of an audit of the entire Board of Education budget and noted that it will take a while to complete. He recommended the Superintendent contract also be examined carefully.
Mr. Lamoin asked how the broad audit information would be used, in light of the Board of Education’s disapproval of the overpayment being refunded to the City. Mayor Carbone explained that the Board of Finance will keep this information in mind as they review future budgets. She said they need to learn where the internal controls are and what the processes are.
Mayor Carbone expressed her concern that the I.T. contract was paid one year in advance in FY12/13, and in July 2013, the consultants were billing every month for a flat amount of $20,000 for consulting services and $3,417 each for two on-site technicians. She said there is no explanation for what those invoices covered, and ironically, the July through March invoices are missing.
Councilor Ruwet said she is looking for the positive outcomes that may initiate shared services and increased efficiencies.
Councilor Anderson clarified that whether or not an auditor has employees in town or does business here doesn’t matter as long as the auditor meets the independence criteria. He explained that a forensic audit is done with the idea of litigation in mind, and can be submitted to a court as evidence if needed. He said the City needs an auditor to go into the details and give us the information that we request.
Mr. Bushka asked for clarification that the Board of Finance is not authorizing any spending at this point. Mayor Carbone explained that our auditing firm recommended that the best practice would be to cover this expense from our General Fund. Mr. Bushka said he is not willing to approve that without knowing the dollar amount and Mayor Carbone said she will initiate an RFP. She said she is looking for the Board to agree that this is the appropriate way to fund the independent audit.
CITY COUNCIL VOTE
On a motion by Councilor Cavagnero, seconded by Councilor Cogswell, the Council voted unanimously to authorize the Mayor to proceed with a forensic audit of the I.T. contract with Protected Harbor I.T. Services; and to authorize the Mayor to scope out an RFP for that forensic audit; and to approve the Mayor’s request to convene an ad hoc committee consisting of members of the Board of Education, City Council, the Board of Finance, City Staff and the Mayor to focus on, and identify, risk areas which indicate a need to proceed with an independent audit.
BOARD OF FINANCE VOTE
Mr. Lamoin asked if using the fund balance to pay for the audit would have a negative connotation. Mr. Scoville said the auditor had recommended that the City add to the fund balance every year, and funds could be removed as long as monies are added. He said the Board will need that information before that decision is made. Mayor Carbone said that conservative estimates indicate that the fiscal year will close with a surplus for the fund balance. Mr. Lamoin clarified that the motion would be to agree with the concept of using the fund balance.
On a motion by Mr. Rubino, seconded by Mr. Scoville, the Board of Finance voted unanimously to use the fund balance to provide a funding stream for the cost of the audit, once the cost has been identified and brought back to the Board of Finance for approval.
ADJOURNMENT
On a motion by Mr. Rubino, seconded by Mr. Scoville, the meeting was adjourned at 7:32 p.m.
ATTEST: JOSEPH L. QUARTIERO, CMC
CITY CLERK
Carol L. Anderson, MCTC, CMC
Asst. City Clerk
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