When I was a teacher, we had a rule that students could not use cell phones in our classrooms. The rule was created to keep students focused on class activities and not on their phones. It never failed that a student would pull out a phone during class and when asked to put it away would say, "But my other teachers let us do it." At that point, the teacher would say, "I'm not your other teachers. I expect you to do the right thing, pay attention and learn."
The Commissioners and Town Office of Oxford might want to pay attention to that idea and take action regarding deficiencies pointed out in seven years of town audits.
The Oxford Town Meeting held on January 23, 2024 centered around the presentation of UHY LLP Certified Public Accountants by Roy Geiser. Geiser is listed as a Partner and Managing Director UHY Advisors. He was sharing the 2023 Oxford Town Audit.
After introductions and explanations of the duties of his company, Geiser reviewed the fifty-page audit document. The link to the document is here:
Geiser pointed out many details including some about the category called " Other Post Employment Benefits" which is money set aside to fund health benefits for long time employees who retire. He commented that the town "doesn't fund it" so there were no assets in this category. It is listed as a liability. Appointed Commissioner Susan Delean Botkin asked for his suggestion regarding the category.
"Choose a fund and fund it," was Geiser's response. He pointed out that many other small towns are starting to do just that.
Of particular note was at the end of the presentation when Geiser reiterated a deficiency in town practices that had been pointed out in audits since 2016. The audits have stated that the town does not segregate duties among different employees when it comes to finances. This can cause a lack of "internal controls."
Geiser repeated the same excuse for this practice that the Oxford Commissioners have given every year, "there's not enough staff." He also said that this was "not out of the ordinary for small towns."
If you are a citizen of Oxford, does it matter to you if other towns ignore this problem?
When a citizen asked about what other small towns do to fix this problem, Geiser said that some just accept it, others hire third party consultants, hire part time staff, allow council members to be involved in the financial processes, or create a town audit committee.
He did not recommend the last two. I don't recommend the first one.
Another taxpayer asked if the town could hire a Planner/Treasurer to fill the vacancy of recently resigned Maria Brophy, who was strictly a town planner. Commissioner Katrina Greer said they were investigating the possibility.
When Geiser was asked if he questions the month-to-month accuracy of financial matters in the town, Geiser said they don't look at month to month.
After his presentation was over, the town thanked him for his time and moved on to other matters.
The town is left with the question that has been asked since 2016. Here is an excerpt from the 2023 Audit:
Finding Number 2023-001
Criteria: Proper segregation of duties should be in place to strengthen internal controls to
provide reasonable assurance that a material misstatement to the financial statements is
Condition: We noted that the system currently in place with regard to the review of bank
reconciliations and utility billing and collection creates conflicts within duties assigned to a single
individual and produces a high level of internal control risk. During our audit, we noted a lack of
segregation of duties.
Cause: The lack of appropriately designed internal control systems has produced conflicts
regarding assigned duties.
Effect: Segregation of duties issues does not allow management or employees, in the normal
course of performing their assigned functions, to prevent, or detect and correct, the
misappropriation of assets and/or errors on a timely basis.
Recommendation: We recommend that, when possible, responsibilities for authorization,
recording, and maintaining custody of assets be assigned to different employees. In situations
where this is not possible, we recommend the implementation of certain transaction review
controls. It is important to note that review controls do not eliminate all risk when segregation of
duties conflicts exist, and management and those charged with governance need to be aware of
Identification of Repeat Finding: Due to the nature and size of the Town, this is a repeat finding.
Of particular interest THIS YEAR is the NEW response from Town Management included in the audit narrative. From the audit report:
Sounds good, right? Well, except for a few things. For one thing, the language of this response gives town management too much wiggle room when it comes to implementing safeguards.
First, it is a billing system. Billing systems are only as good as the people who put in the data. So, it is not the sole answer. Second, notice the word "allow." The word "allow" is defined as "giving someone permission to do something." Shouldn't that be changed to "require?" By changing "allow" to "require" the town would MANDATE that there would be two party review, not merely give permission.
The town administration follows it up with a phrase that states that there would be "requirements" for dual signatures for authorization on RELEVANT transactions. A couple of questions. What are "relevant" transactions? Specific amounts? Specific vendors or recipients? Shouldn't ALL transactions require dual signatures? I was involved in a non-profit for years and we required two signatures for every amount. It wasn't because people were dishonest, but because it is the RIGHT thing to do.
And, this "quarterly external review" of bookkeeping software and bank reconciliations. Who will do the external review? As we have discovered, the town often allows certain ex-Commissioners to conduct official business for the town. Will this be the same? As a reminder, external does not guarantee impartial or without conflict of interest. There needs to be more specifics.
It seems like town leadership is turning itself inside out NOT to have another employee share financial responsibilities with the Town Manager. We are not talking about a huge staff. We had three employees in our office during all these audits. That would be sufficient to provide oversight by at least two employees and a way to prevent internal conflict and mistakes.
The ridiculous excuse that other towns only have one person in charge of the town's finances doesn't cut it anymore. This is Oxford. The citizens and taxpayers of this town expect MORE out of our town and don't care what other towns do.
We expect our town to do the right thing and perform to a higher standard.