WORK SESSION MINUTES
FEBRUARY 27, 2007
TOWN OF PITTSFIELD
BOARD OF SELECTMAN
TOWN HALL, 85 MAIN STREET
PITTSFIELD, NH 03263
CALL TO ORDER
WORK SESSION Call to order at 4:34 P.M.
MEMBERS PRESENT
Art Morse (AM), Chairman, Larry Konopka (LK), Vice-Chairman, Linda
Small (LS), Ed Vien (EV), Donna Keeley (DK), Paul Skrowan (PS), Town
Administrator, and Delores Fritz, Recording Secretary.
PURPOSE
(AM) This Work Session is to review Internal Control Assessment.
(PS) Mr. Chairman, prior to commencing with this work session on the
Internal Control Assessment, I have some information for the Board from
Plodzik and Sanderson, Auditors, for the Town of Pittsfield. It is important
you read this before we get into the Internal Control Assessment. It has a
bearing on assessment and probability which are indicators of the more strict
controls applied to Municipal Finance Center.
(AM) Obviously, after a quick read, these things apply to internal controls
but this is something to consider – preparing financial reports. “Linda, can
you do this?” (LS) Yes, but I would not be two keen about doing it.” (AM)
I wonder in reading this and discussing with (PS) whether whoever we get to
reproduce these documents are held liable?” (PS) responded “Yes and No.”
(AM) commented that it would have to be someone who is bonded. (PS)
related that the bond the Town of Pittsfield has covers all municipal
employees. It requires someone who has capabilities to prepare them on one
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level and then share and take responsibility for them on another level.
(DK) Would this require someone who has their own coverage?” (PS) It
would require someone capable of performing all the work. I will talk with
staff at MRI to see where this staff person would fall. (AM) The question is
“How do we become compliant?” (LS) The biggest piece of this is the
assets, which is between Cara and the auditors. It is a big job to determine
the assets and put a value to them. My question – is everything audited after
2006 included in this? (PS) Yes. (LS) So 2006 is not what it needs to be
either, correct? (PS) Yes. Again, I would like to bring to the Board’s
attention, the tightness of rules and regulations as we move forward. (LS)
This person would prepare financial statements; someone internal would
have to review it. (PS) The auditors would prepare the statements and
review with someone who would understand it and willingly take
responsibility for them. (AM) Someone to determine they are correct. (LK)
How long would it take for this person to do this, two to three weeks? (PS)
In the beginning a little longer, but eventually just hours. (LS) The problem
is finding and hiring someone. (AM) Let’s bring this back after election.
Agreeable? (All consented.)
(AM) Internal Controls Assessment – I would like to note in the cover letter
from Don Jutton, “…. overall the Town of Pittsfield has good quality
systems and procedures in place presenting numerous strengths and limited
weaknesses.” There is quite a bit contained in this assessment and I suggest
we pull out two or three areas and get working on that and pick-up more as
we move along. The two areas to start with are:
1. Handling of Receivables and Payables
a. Who does this?
b. Procedure (Not because it is going wrong)
2. Changing of Tax Records
a. Who does it?
b. Controls
Taxation is the biggest part of financing.
(DK) I was recently using computer at Anne’s desk, and the software is
right there and very easy to change. (LS) Assessor and tax collections
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records staff should not be able to go into each other’s records. This is a
very important thing. No one should be able to get into software and change
records except authorized person.
(PS) No. 4: Separation of Duties
I know it is not easy to view organization in a generic way – people minus
personalities. You need to view these functions with no bearing on who
occupies the position. My comment about software is pretty pointed that
only the tax collector should have responsibility over tax collection records.
The Administrative Assistant should have no access to software to
change/alter records, only READ information.
No. 8: Review of Software Access and Levels of Responsibility
We need to check if the present software capabilities include passwords, the
locking out of certain individuals, and the ability not to be altered except by
the appropriate individual responsible for the record. No. 4 ties in with No.
8. It is necessary you view that software in conjunction with assessing
software.
No. 5: Separation of Duties
This is pretty straightforward. The current Administrative Assistant has
authority over bank accounts. Only the Treasurer and Deputy Treasurer
should be the designated signatures on the account. Change the signature
cards so only the Treasurer and Deputy Treasurer have that ability.
(AM) I think before we act on any of these, we need to talk with the people
involved. There may be good reason why these things are occurring. We
need to first understand them, pick things out and then talk to the people
involved. (DK) I think we need to meet as a group with the Department
Heads involved. (EV) I agree with you. It is not as clear as stated here why
they do it the way they do it. (DK) It is their job and we should include
everyone in decisions for change. (AM) We are a small organization
(Town) so there are only a few people in finance department and we might
do things differently because of resources. (LS) I think we should talk with
the staff and get their feedback. (EV) These assessors come in and look at
people as robots and our people are dealt with as people we know. (DK) We
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need to make them aware of why decision has to be made and be sensitive to
the fact that we know the person doing the particular job. (EV) Some of
these decisions, the staff will not be happy about. (LK) It depends on how
they are approached. No one likes change. Common sense should dictate
that we be careful.
(PS) The underlying threat about this Internal Controls Assessment is the
auditors. All things in the financial world are focused on the governing
body. Stating “I didn’t know” is not adequate. You are supposed to know.
Boards can no longer plead, “I didn’t know.” Ignorance is not a defense.
(LS) Our software is not user friendly and it should be assessed. It is not
what it should be. (AM) Noting No. 8: The computer software that the
Town uses for essential financial functions is capable of limiting the kinds of
access individuals have to the data. Many persons can have the ability to
look at data and generate reports as needed without having the ability to alter
the database. On the computer software, is there an industry standard as to
what most towns use? (LS) There are only a handful of companies out there
with the appropriate software. (AM) If we look at upgrading software, we
should be going back to the auditor for recommendations. All of this goes
together. (AM) Further comments or suggestions? (None)
(PS) Regarding the first three findings, recommendations and observations
concerns the Board of Selectman. You can repeatedly read this report and
find something new each time. It needs to be methodically approached and
needs to include the newly elected officials. They should participate in this.
As to policies and objectives, this is the weightiest responsibility the Board
has. Boards sometimes find it easier to retain somebody, which can be a
reasonable way Boards of Selectman achieve some of the goals. Board may
want to think about this – it would be a facilitator. (EV) We should be doing
what we are supposed to be doing. We should be looking to the future
which we have not had time to do. We should have a five-year mission
statement, which would give us a good road map of where we want to be.
We need to look to the future more. (LS) We need to know what to do, how
to get there, and prioritize. It is important to outline and set priorities. We
should advise Department Heads what we require in order to get there.
(EV) We have had a lot of turmoil within Town this past year. We had to
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get a new Fire Chief, the Town Administrator left and there were other
issues but the Board stayed together and accomplished what it had to do.
(LK) We need a full-time Town Administrator to coordinate this. Things
have been hectic around here this past year. (DK) We need additional office
staff and a full-time Town Administrator in here and let Paul continue doing
what he needs to do. (EV) noted that during candidate night (last night)
several individuals commented on the lack of communication of the Board.
Communication goes both ways. We are always here to listen. We are here
each Tuesday night and I am starting to get upset with people stating that
there is no communication. I am always available and can always be
reached, either at home or at work. (DK) I agree. We are here each
Tuesday night. Department Heads know where we are and how we can be
reached. (LK) People are not willing to go to the person they have a
problem with. I agree with you.
(PS) Mr. Chairman, I think there is a lot to ponder here. This assessment is
a reference you can keep and every once in a while, open it up and re-read.
(DK) I think we should pick out one or two things and start the process of
working on it. (LS) We need a full-time Town Administrator. The staff has
been left to do what has to be done. I think bad habits or any habit is hard to
break. (AM) I think it is a good idea if the new Board of Selectman during
one of its first meetings takes the time to define how many goals to work on.
I think three to five goals during the year would be appropriate. These goals
have to be achieved with the Department Heads as well. We can come up
with some goals we all want to work with. (LS) I think having each one of
the Department Heads respond to their section of assessment might be of
value. (AM) I am not sure about that. I suggest we select only one of the
Departments at a time. It is very discouraging to an employee when their
feedback takes a long time to be evaluated. I always like it when the person
knows what we are going to talk about and also have it in writing. I think
we should limit it to one department at a time. (EV) That way, they know
what’s coming. (LS) Good point, people like to hear back soon.
(AM) Let’s take No. 4: Separation of Duties, Liz and Cara. (PS) can
present this to them and get their feedback. (DK) Let’s look for their
opinion, how they perceive it to take place and if it is practical to do it.
Present the problem and ask what is the solution. (EV) I do not see the
Board following each one of these presentations. (AM) This is simply a
reaction to these things; we do not have to agree with it. (DK) Ask for
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feedback and if we do not agree it is productive then we can have pros and
cons as to how it can be more productive. (AM) We need to ask them to
accept recommendations without their rebutting it. (DK) They know what is
in this report, they need to tell us whether they like it or not and how they
feel. We are not ready to implement this, but we need to know their “gut
reaction to this.” (AM) We can learn from this. (EV) The first three are
more or less for the Board. We need a Town Administrator ASAP. The cutoff
is March 1st and I do not think we should hire someone just for the sake
of hiring someone. (LK) I think the resumes include some good, qualified
people.
(AM) Anything else? (PS) When would you like an answer to your
inquiry? (AM) After new Board is seated. (PS) By March 9th? (DK) Is
there a Board meeting on the 13th? (AM) We will address that at the Board
meeting. Let us recess until 6:00 P.M. when the regular meeting begins and
then we can make a decision about the 13th.
(LK) Paul, could we have copies of the incoming resumes for Town
Administrator to take home and review. (PS) First batch was sent off to
MRI, the second batch is still here with some copies sent to MRI. I will get
copies of all the resumes and get them back to you. (EV) I agree with
Larry, we should have copies of all the resumes for review.
(AM) It is 5:40 P.M. Let’s recess to 6:00 P.M.
END OF WORK SESSION
APPROVED: March 6, 2007
Date
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