Embezzlement epidemic in Vt.
On a recent radio program that focused on the epidemic of embezzlement in Vermont, the commentators agreed that the cause was Vermonters being too trusting. It is a conclusion that ignores the obvious ó the lack of oversight, the lack of people in charge of large sums of money and accounting systems that donít comply with national standards.
On Dec. 4, the CPA firm of Fothergill, Segale & Valley presented an independent auditorís report and financial statements for the year ending Dec. 31, 2012, to the Select Board and town treasurer of Cabot. That report included an adverse opinion with a finding that ďCabot prepares its financial statements on the modified cash basis and not on an actual basis, which is a comprehensive basis of accounting other than accounting principles generally accepted in the U.S.A., and a finding of ĎMaterial Weakness caused by Significant Deficiency and Internal Control.íĒ
When I mentioned, at town meeting, that these were not insignificant findings, the Select Board dismissed it altogether. When I asked the town clerk-treasurer if this yearís town report reflected the double entry, accrual-based accounting system, she said yes, it did, when clearly it did not. There hasnít been a double entry system in Cabot for over 20 years, which means all those reports that came after that and before this new CPA report are suspect and should be subject to review. When I asked why the practice of the town clerk-treasurer handing out printed figure changes to the town report minutes before the town meeting continues, Cabotís clerk-treasurer said there were no corrections, when, in fact, little yellow sheets of those corrections were on every voterís seat. These changes are never reconciled with the budgets being voted on, leaving voters approving of figures that arenít printed in the town report.
The town auditors do everything but audit the town accounts, and those positions should be eliminated. And the CPA audit occurs after town meeting, which provides little assurance to the voting public. With no real oversight and people elected into official positions without the proper qualifications, a lot of mischief can take place. Large sums of money flow through these towns, and those officials who want to maintain opaque, unexplained accounting practices should be replaced. And the governor should appoint a task force of qualified accountants to perform unannounced, forensic audits of all towns and school districts in Vermont.
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