Budget audit 'troublesome'

WINSTED — An official audit of the town’s 2007-08 budget was presented to the Board of Selectmen Monday, July 6, months after its scheduled completion date, indicating numerous accounts were out of balance and the town’s general fund is dangerously low.

“As you all know, it was a pretty troublesome audit this year,� said Vanessa Rossitto, an accountant and partner at Blum Shapiro in West Hartford. “We just issued the audit on the 24th of June for a number of reasons.�

Rossitto said the audit was late because, in part, Finance Director Henry Centrella has been on leave for much of the past year, and staff members are not adequately trained to complete a review of the budget.

Rossitto noted that the town’s fund balance, or general savings fund, is “severely low,� at $800,076, or 2.62 percent of overall revenues. She said towns are generally expected to maintain fund balances of 5 to 15 percent of revenues in order to maintain good credit.

Asked about the fund balance Tuesday, Town Manager Keith Robbins said the situation is not dire.

“It’s a temporary situation. There are only two ways to build up a fund balance — drastically reduce spending or increase revenue.�

In recent years, boards of selectmen have decided to spend money that would normally be earmarked to replenish the fund balance. Money returned to Winsted from the demutualization of Anthem Blue Cross in 2003, for instance, was used to increase revenue, resulting in a one-time savings for taxpayers.

“In the past several years, we have used money from the fund balance to pay for some operational costs to offset any increase in taxes,� Robbins said. “Nobody likes paying taxes, myself included, but if you go long periods of time with zero revenue increases, you end up in situation where a lot of your infrastructure begins to suffer.�

Members of the Board of Selectmen expressed dismay that numbers from the 2007-08 budget were never properly resolved. Accounts that were overspent ended up being paid for with money from other line items, and some of the transfers were never approved.

Rossitto told the board that more people at Town Hall, other than the finance director, need to be trained in accounting procedures.

“Henry has a lot of institutional knowledge,� she said. “We have been recommending that you need to cross-train because, God forbid, he wins Lotto and flies off to Fiji or something, you’re in trouble — and I think you found that out this year.�

Rositto said the town’s accounting suffers when Centrella is out for extended periods.

“First, he was granted his vacation leave, so he was out for most of the year, and then he got ill and everything kind of shut down,� she said. “There needs to be some kind of accounting policies and procedures manual so somebody can pick it up and move the town on its way without Henry being here.�

Selectmen said they want monthly updates from the finance director in the future to monitor line items and anticipate the need for fund transfers. Robbins said he is developing a monthly report to give to the board that will include updated fiscal information.

The town manager added that the problem with Winsted’s fund balance will not be corrected overnight.

“You’re looking at a three- to-five-year project to bring it back to a reasonable number,� he said. “The thing we have to do is not use it for anything and begin to return some funds at the end of every fiscal year. It’s a savings account. You don’t spend it.�

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