What flunkey will land in this spot??

I believe it is called the "Peter Principle".
Very interesting reading. If you haven't done so...please do...

If you haven't read the DOR report of the Town of Wareham Financial Management review,  here is the website: http://www.mass.gov/Ador/docs/dls/mdmst … hamFMR.pdf

Not exactly light reading, but VERY informative!!

The reason for hiring an assistant to the accountant is advised in the report here:

Conclusion – Day-to-day accountant responsibilities are being completed including the maintenance of municipal books and processing vendor and payroll warrants. The concerns we have generally deal with higher-level issues such as preventing appropriation deficits, verifying revolving funds, and closing the town’s books as described in the overall financial management section of this report. Of concern as well is the absence of a designated person with the skills necessary to act in the accountant’s place. In addition, the town accountant must begin reconciling cash and receivables on a monthly basis, and the department should also verify that offices are reconciling expenditure reports.

32. Establish Expectations

The town accountant has legal everyday duties that require her attention and also has an instrumental role in addressing the financial management concerns expressed in the Director of Account’s April letter and outlined at the beginning of this report. To create focus and measure progress, we recommend that the town administrator and accountant agree to a clear set of priorities. Once the town administrator’s expectations are established, the accountant should develop a timeline for completing the tasks necessary to meet them. To help, she should set aside time each day when she can work without interruption.
In addition, we believe the town accountant could benefit from continued training to help her meet the reporting requirements of DOR for the Tax Recap Sheet, Schedule A and year-end balance sheet for free cash certification. Available resources include the Massachusetts Municipal Auditors’ & Accountants’ Association (MMAAA) which hosts an annual school in Amherst, MA, as well as the Division of Local Services which has a number of publications and guidelines available on its website www.mass.gov/dls. Although it can be expensive, officials might also consider the services of an outside consultant who can sit with the accountant one-on-one and review practices and procedures.

    33. Appoint Assistant Town Accountant

Given the growing financial complexities and demands on the office, the need to appoint a skilled assistant town accountant is becoming increasingly apparent. The individual should be trained in municipal accounting practices and have the skills necessary to perform a variety of professional accounting duties, including the monitoring and reconciliation of accounts and preparing complex records and reports. The individual should also have the ability to assume the responsibilities of, and have authorization to act as, the town accountant in the event of her absence.

    34. Complete Monthly Reconciliations

It is our understanding that although internal reconciliations of cash and receivables are taking place in the treasurer/collector’s office, balances have not been reconciled to the accountant’s general ledger since June 2009. According to the accountant, this gap is attributed to issues with the current software. Still, the reconciliation of cash and receivables are essential financial controls and should be a priority. The town accountant is primarily responsible for coordinating regular monthly reconciliations and should arrange a time with the treasurer/collector at the end each month to meet and complete reconciliations, or to receive balances that she would then compare to the general ledger. It is their collective responsibility to resolve variances. To be successful, all respective records need to be up-to-date. The town administrator should consider appropriate steps to ensure that a regular schedule of reconciliations takes place moving forward. We also encourage the reconciliation of debt and grants.

Ham of Peace here.

That is quite a DOR report!  It should be required reading for every resident of Wareham!

Peace bloggers, I am feeling like a vindicated Ham of Peace today.  For a long time now, I have pointed out that the former dictatorship's decision to play musical chairs with the town administrator position was a bad move that would only have negative effects on Wareham.

Read this excerpt from page 2 and see for yourself, the Mass DOR has officially stated that too many TA's being sacked has been bad for Wareham's financial situation:

DOR wrote:

It is our opinion that one of the greatest impediments to success in Wareham has been the turnover in the town administrator’s position. Since 2000, seven individuals have held the position. The lack of continuity in the administrator’s position has been particularly detrimental because of the authority attributed to the position and its intended impact on the operation of government. When the position is vacant, the absence of consistent leadership makes resolving issues more difficult. It also creates a management vacuum causing lines of responsibility for day-to-day operations to blur.

On the same page, the DOR lists a second reason for Wareham's financial problems:

DOR wrote:

Contributing to the lack of consistent financial management leadership was the six-month vacancy in the town accountant’s position. From January 2009 to July 2009, only basic accounting activities were completed. During this period, the town employed the services of Financial Advisory Associates (FAA) to perform essential day-to-day activities, but no real policy or analytical support was available.

Too much TA turnover and letting the town accountant position go unfilled for 6 months, two big problems pointed out by the DOR, and two big problems attributable to the former dictatorship.

Please read this report and then vote accordingly on April 5, 2011.

The Peter Principle personified!

Since the sewer is a hot topic in town, here is what the report says about the water pollution control facility and the Enterprise Fund---

In the wake of the Director of Account’s April 2010 letter, the town administrator and the finance officers need to move forward with a clear purpose. In the near-term, decisions are needed to balance the budget and, longer-term, action is needed to develop realistic revenue estimates and control operating expenses. In addition, decision-makers need the discipline to adhere to already established fiscal guidelines that encourage generating free cash and building reserves. Local officials should also continue efforts to develop a comprehensive capital-planning program, and address concerns relative to the water pollution control facility, which has become overly reliant on one-time revenues and operates with a structural budget deficit.


Establish Enterprise Fund Expectations
The water pollution control facility enterprise fund is intended to account for all direct, indirect and capital costs associated with the sewerage treatment operation. The selectmen should then set user fees at an appropriate level to recover those costs and to generate a reasonable surplus, which would remain available for use only for enterprise purposes. However, it is clear from historical data that the enterprise fund operates with a structural deficit. Over the preceding three fiscal years, the facility has relied on over $1,263,880 in retained earnings to support ongoing operations as reported to DOR, the bulk of which has been generated from betterment assessments paid in full rather than over the apportioned period. This use of retained earnings is lawful, but not prudent. In order to strengthen overall business practices and to establish long-term financial stability, we offer the following recommendations:
􀂃 Build a Multi-Year Revenue and Expenditure Forecast: A realistic multi-year revenue and expenditure forecast allows officials to better understand and quantify the long-term cash flow needs and the fiscal impact of current policy decisions. It contributes in a significant way to the annual budget process by working hand-in-hand with the capital planning and fee setting process.
􀂃 Establish a Comprehensive Capital Improvement Program: A multi-year capital plan to maintain and improve infrastructure should embody clear spending priorities. A five-year projection, updated annually should be presented to the capital planning committee and incorporated into the town’s overall capital plan.
Division of Local Services Financial Management Review
Town of Wareham 1 2 Overall Financial Management
􀂃 Review Rates: User rates should be reviewed annually to verify that revenues adequately cover the total operating costs. The review should coincide with the town’s annual budget process and rates should take effect prospectively on July 1.
􀂃 Make Decisions on the Use of Retained Earnings: A reasonable retained earnings balance is tied to anticipated expenditures for planned capital improvements and allows for a reserve to cover unforeseen costs. Periodic use of retained earnings to offset rates is acceptable, but should not be an annual practice.
􀂃 Outline Indirect Cost Formula: An indirect cost is the time devoted and/or expenses incurred by other town departments in the interest of enterprise fund activities. The town accountant should gather this information through interviews with staff and, as one option, can use the following formula for calculating indirect costs.
Hours Worked on Enterprise Activities per year by Individual(s)

Total Hours Worked per year by Individual(s)

X
Salary and benefits of Individual(s) Working on Enterprise Activities
=
Indirect Departmental Salaries

This is a comment about the above sent to me from a reader who does not blog (never know when you might want to apply to be on a committee!!!). So here is that person's comment:

"Effectively, they have been robbing from the retained earnings to keep the sewer rates low. THis amount ($1,263,880) was to be used to pay off long term debt associated with betterments. Those that paid in full (pre-paid) , the money went to retained earnings. By using this money to supplement the budget for the facility, they will leave us with long term debt that has no matching revenues (betterment fees). short term gain for long term pain. It is possible that we will have to incur additional debt to pay off the existing debt or the rates in later years will be VERY HIGH. This is a very poor practice and not financially sound. Who did it benefit??? Those that are paying sewer rates...hmmm, okay! Consider this a 1.3 million dollar debt for political favors. They realize they will not be around to answer for their poor judgment!"

Thank you Nora for posting part of the DOR report  and a link to the rest of the report. I knew things were bad from what Andrews said at one of the selectman’s meeting. He failed to mention how bad things were and who the DOR blamed for the mess.

If the DOR is saying the assistant town accountant should have the ‘ability to assume responsibilities of the town accountant” why aren’t we advertising for a part time accountant with a 4 year degree? I bet there are a lot of accountants out there that might only want to work part time. Maybe we could get Myles Burke to give up his extra 20,000 so we could hire a part time accountant with a four year degree.

The TA got this report in June. Out of all the things the DOR recommended and an easy fix was to hire an assistant. Why didn’t they advertise for the job right away?

I wonder how many of the selectman have read this report. You know Bobo the clown tabloid writer hasn’t. I don’t think the DOR is at all subtle in blaming the leadership of this town I think they are pretty straight forward in placing the blame for this mess Wareham on the leadership of Wareham or lack of leadership. Not only did  the high turnover of TA’s and waiting 6 months for the accountant contibute to this mess but don’t forget Butt Monkey had the TA’s job for a year or more before they finally decided to replace him once all the damage was done.