Piercing the
veil of secrecy
By Stephen Hoff
It is time to
pull the curtain back on how Charlestown manages the thousands of dollars you
pay in taxes each year and the transparency level that they allow us to
see. It all starts at the top with a majority control of the Town Council
and runs directly downhill through the Town Administrator Mark Stankiewicz who
owes his $150,000 a year job to that same majority, as do non-taxpayer third
parties who are paid for their institutional support.
It is classic
old style politics where to the victors go the spoils. However, it can
be changed by us bi-annually if we can no longer support the status quo and
have individuals willing to serve that share our beliefs.
This article
and other future articles will highlight some of my personal forays into the
Town’s accounting and financial practices that I have examined over the past
couple of years.
It is based on
26 separate open records (APRA) requests, several Attorney
General appeals, and a letter to the Auditor General of RI regarding the Town’s
management’s
capabilities and accounting practices that I, as well as our outside auditors,
have found to be lacking in multiple ways.
I began
digging in deeper and deeper with each passing month, because it was clear
there were serious problems and issues, as well as a fierce resistance by the
Town staff to answer reasonable questions freely or to charge reasonable prices
for what have been heavily redacted copies of documents if they haven’t been
simply denied outright.
In effect, I
have become an unauthorized and unpaid “internal auditor” – and probably an unwelcome one
at that - poking around very fertile ground in the hopes of determining what
has been going on in Town Hall.
I do this by
simply asking questions and seeking documents and “looking under the
hood”.
However, my
access to information is much more restricted than a “internal
auditor” would have.
They wouldn’t have had to pay out of pocket for information that is heavily
redacted, making my job all the harder as well as more expensive.
In fact, I
think that this is the Town’s motto, “Make
it Hard and Expensive and They Will Just Go Away.” Just so you know, I
don’t plan to go away.
It’s
reasonable for you to ask why you should believe what I share with you.
My candid response is that I am not a feeder at the town trough. I get no
payments from the town, am not seeking a job with the town paid or unpaid, and
must personally pay for information that I request.
It also takes
hours of my free time and I am only able to scratch the surface because of very
limited access to the documents that I attempt to obtain.
I ask you to
trust me as a CPA, a former municipal Finance Director for 15 years, and a
former auditor of municipal governments. I hold an MBA in Finance and I believe
Charlestown can do better than we have been doing. And if you have read
this far, I bet you think that we can do better as well.
Treasurer Cover Up -
True or False?
The Town employed 2 full time Treasurers at the same time for 5
months during Fiscal Year 2020, both being paid over $100,000 each in base
salaries in addition to all their accrued benefits. Yet, the Town was
still unable to get audited financial statements issued that did not overstate
UFB by $3 million in Fiscal Year 2020! True!
You didn’t
know this because the Town Council choreographed a magnificent charade on
August 13, 2019 for public consumption that announced that Pat Anderson, the
Town’s Treasurer, was retiring. They even gave her a Certificate of
Appreciation on her retirement. See it for yourself on Town video at
their 7 PM meeting.
Her
replacement had already been previously approved by the Town Council.
Little did anyone know at the time that Ms. Anderson continued to be a full
time employee of the Town through the end of January 2020 apparently accruing
additional full benefits.
Now that this
precedent has been set I have no doubt that future employees leaving town
employment with severance benefits due to them will be demanding the same
additional severance benefits accorded to Ms. Anderson even if they are not
specifically allowed in her union contract.
This was pure and unadulterated deception by the Town Council and the
Town Administrator!
Then, there
was the accounting cover up! The Town had only budgeted for one Treasurer
in the budget approved at referendum. So, how could the Town hide the
fact that we still had 2 Treasurers? Someone came up with the bright idea
of charging her 5 months of salary ($43,769.33) to an account outside the
General Fund that is used to account for Severance Benefits once an employee
has left Town employment.
Unfortunately,
the Town wasn’t savvy enough to realize that she hadn’t actually left Town
employment and was still an active full time employee, or they simply ignored
the fact.
Therefore, the
Town just charged her salary to this other Fund anyway, which begs the question
of who decided to do this and on whose authority? The Town Administrator
perhaps, who oversees the Office of the Treasurer?
It had to be
someone who knew how Town budgets were structured and what alternatives could
obscure the truth from being revealed. There are undoubtedly fingerprints
on the documents somewhere in Town Hall that relate to this decision.
Unfortunately,
there was a glitch to the Town’s “creative” accounting, because it was not
allowed by Generally Accepted Accounting Principles since Pat Anderson had
remained a full time employee during this time.
Apparently,
the auditors forced the Town to reverse where the Town had charged the $43,769.33, and moved the
expense back to the Treasurer’s salary line in the General Fund just before the audit was
completed in December 2020.
Unfortunately
most people didn’t notice. However, the accounting looked strange and an open
records request revealed what the Town had worked so hard to hide from the
taxpayers. Now we all have a much better understanding of the depth of the
deception that the Town used to deceive taxpayers and cover up their accounting
manipulations.
I subsequently
obtained a redacted email Letter of Resignation that Pat Anderson
apparently submitted on January 21, 2020 resigning effective January 28, 2020
with an electronic signature.
When I
requested other documents relating to her resignation I was told they would
cost me $363.30 to receive. Doesn’t this sound a bit like a high stakes
poker game where for a hefty price I could see what the Town’s hole card was in
what I can be assured would be a highly redacted document.
I ultimately
decided not to pay the ransom of $363.30 just so I could more easily prove that
the Town had been lying to taxpayers all along, now that I already knew that
they had been.
Think about
this. The Town orchestrated an elaborate charade that our old Treasurer
had retired with a Town Council ceremony and a Proclamation of her meritorious
service, then doubled down on the deception by utilizing improper accounting
which might have worked if the auditors hadn’t made them correct it.
Then, once
confronted about it, they kept what actually occurred from becoming public by
placing a high enough cost on the details that kept the documents private as of
now.
That is not
behavior we want to reward And if the
Town Administrator played no part in it and was oblivious, then who is in
charge and is being ignorant
of the deception a defense of the leadership and knowledge that he is paid to
provide?
With all the
shenanigans going on with this charade and deception I attempted at a minimum
to at least verify that the accounting for Pat Anderson’s severance liability
was accurate. Since the Town is required to maintain a detailed severance
schedule for each employee, I requested a copy of the severance schedule to
review the calculations for her severance benefit.
Initially I
was given a price of $847.50 for a schedule that had already been
prepared and provided to the auditors with no ability to know how much of it
would be redacted. I currently have an appeal pending with the Attorney
General challenging the Town’s claimed cost of $390 for providing only a single
electronic file (Excel Spreadsheet) of the Severance liability for fiscal year
2020.
If you think I
am the only one trying to get this schedule you would be wrong. Even our
Town Council President Deb Carney can’t get it and she is the top Elected
Official in Town. In an effort to keep this schedule from being provided to
her, the three CCA members went so far as to vote to even deny her the right to
see these documents. So much for their claim of providing transparency to
Charlestown’s taxpayers.
So, if I can’t
get the document and the Town Council President can’t get this same document,
then who can? Something is wrong with the system when only Town employees
can see this schedule that documents Charlestown’s $1.3 million liability, all
of whom are themselves beneficiaries of the generous severance benefits
provided by taxpayers, and that includes the Town Administrator.
Some may think these are small matters in the global scheme of
things. To an extent, they are right. But I am reminded of 1984 author
George Orwell’s view that:
"Threats
to freedom of speech, writing, and action, though often trivial in isolation,
are cumulative in their effect, and unless checked, lead to a general
disrespect for the rights of the citizen.”