Saugus finance board concerned over audit letter

SAUGUS – The Saugus Finance Committee had a lot of questions for Town Manager Scott Crabtree regarding the management letter for the annual town audit.Finance Committee member Maureen Dever said the management letter was “very comprehensive,” but noted she?s never seen an audit so “strongly worded.”?What is striking to me is page after page after page was that there were material weaknesses over internal controls and violations of municipal finance law,” she said.?Were these violations ever reported? When and to whom? That is the question everyone asks after the year we had.”Crabtree, who was on vacation, was not available to answer questions, and the committee will look to schedule a meeting with him and auditors.According to the letter, the audit findings “demonstrate that the town violated municipal finance laws, rules and regulations.”?Our findings lead us to believe that there was a systematic, knowledgeable and intentional violation of finance laws that led to misleading and fraudulent accounting of the actual nature of the financial transactions for the years under review,” said the letter.The management letter states the violations include more than $1.4 million in general fund expenses posted to enterprise accounts in 2011 and 2012.Committee member Theresa Katsos wanted to know why the committee was just seeing the management letter Wednesday.?This letter is dated Aug. 31,” she said. “Why are we just being made aware of this now?”The management letter also states that Crabtree made “sweeping changes” on how transactions were processed and how budgets were prepared.”?We reviewed how these changes impacted FY13 operations and have determined that if the accounting changes, implemented at the end of FY12 and early FY13, continue for the entire 2013 fiscal year then material weaknesses that existed during FY12 will be eliminated,” said the letter.Dever noted that one of the recommendations, implementing a risk assessment program, is something the town might want to do “given our history.”In other business, the committee briefly discussed the current proposed town budget.Committee member Ronald Jepson asked if it?s sustainable.?There?s nothing in here that shows me it?s sustainable,” he said. “We can?t sustain these increases for future years. I want to make sure we?re good not for just one year ? the manager needs to show how this spending is going to be sustainable.”The committee will review the budget and meet again next Wednesday.Matt Tempesta can be reached at [email protected].