It was exactly one year ago that we first reported the alarming condition of Wellfleet’s finances, after interim Town Administrator Charles Sumner revealed that the town did not have a general ledger or balance sheet and would not have access to the million dollars, more or less, in “free cash” that would ordinarily help balance its budget — because the state had not certified Wellfleet’s books for almost two years.
“It will take several months to work our way through this,” said Sumner at the time. “The public can have confidence that it is possible to go back and correct these problems, but it will take time.”
The books are still not balanced.
In early February, Sumner and interim accountants Mary McIsaac and Lisa Souve said the books for fiscal 2020 and 2021 would certainly be closed by the second week of March, so they could be audited in time for town meeting. A month later, on March 8, Sumner told the select board, “I had hoped to be further along in the process … but here we are.”
Last week Sumner said he remained hopeful. “We can see the finish line,” he said.
Normally, in the process of reporting the news, we find that even thorny issues gradually become clearer as we do our research, follow leads, ask questions, and piece together the story. That’s not what has happened with this Wellfleet story. The pieces simply don’t add up, and we are frankly at a loss to understand what is going on.
We’ve been told many times that the problems at Wellfleet Town Hall were the result of staff turnover and technology issues. “You combine a turnover in the accounting department with trying to implement a new system and it’s just a recipe for failure, and that’s basically what happened,” said Michael Nelligan, the town’s audit manager at Powers & Sullivan. He was trying to explain the “unknown variance” of $765,000 his auditors had discovered in the town’s accounts. Nelligan told the select board the variance was related to “the agency fund” — a patently absurd statement. He refuses to speak to reporters.
Sumner maintains that he, McIsaac, and Souve are doing “forensic” accounting work on the town’s books. Last December, he said, “We have done a lot of work looking at these matters and we just haven’t seen anything that would suggest anything other than a lack of training, incompetence, and high turnover.”
But that explanation doesn’t really tell us how things got so bad, why it is taking so much longer than expected to fix them, and how we can keep it from happening again. How did the technology fail us, or how did we fail it? How did mistakes and missteps become so firmly entrenched in daily operations that a year of full-time work by two experienced accountants can’t unravel the mess that was created? What exactly will we not do again?
A “forensic audit,” I believe, is one conducted by an independent outside agency with full investigative authority. Isn’t it long past time for that to happen?
