As
part of my due diligence on town issues while running for Commissioner, I
discovered on Tuesday (Sept. 9) after reviewing the town audited financial report,
that there is a clear and alarming discrepancy in the net results
reported by the town for the recently completed financial year.
The $263,000 budget surplus reported by Town Manager Marc Appelbaum and cited in the
Cape Gazette article on September 3rd is not factually correct and is
misleading the public.
While Generally Accepted Accounting Principles (GAAP) methods of
accounting were not used by the town, the auditors use GAAP in
auditing and the audited results are certified as accurate.
The auditor's report clearly shows $46,590 as the net result, and as
adjusted for interest and a loss on town investments, the exact amount
reported and added to the town surplus account is $49,723.
This is some 80% less than what the town manager has reported to
Council and the press. This is misleading the public about the true
financial status of the town and the public deserves to know the truth. The actual budget surplus amount is $15,269 under the budget target, and the town therefore did not reach its budget goal of $64,992.
In light of this, the current year reporting of the ongoing financial
status of the town must be questioned.
It is clear that the town needs
more routine and proactive financial oversight, and I strongly support
the reinstatement of the town Budget & Finance Committee to provide
this oversight.
Dave Davis
Dave -
ReplyDeleteAs noted in reply to your Cape Gazette letter, you actually can't just move numbers from one accounting framework to another. For example, the town planned to have a budget surplus (using cash accounting) of $64,992, and achieved it. I don't think the town did a GAAP/accrual based budget, so there's not way to know whether $46,590 is higher or lower than whatever that plan would have been.
Indicating that the town "did not reach its budget goal of $64,992" by comparing that cash accounting target to the GAAP/accrual based accounting net surplus is not a proper financial comparison; if you need any assistance with this please feel free to contact me.
/John