New Canaan moves forward with firm for finance department fix
Published 3:49 pm, Wednesday, July 17, 2013
The need for improvements is outlined in the management letter that accompanied the town's audit in the spring. The letter, which was presented to the Town Council on April 30 by O'Connor Davies actuary Marcia Marien, relabeled about $10 million and noted several material weaknesses in town and Board of Education financials. Marien indicated that it was accounting processes and procedures, not individual mistakes, that must be corrected going forward.
Shortly after that management letter, First Selectman Robert Mallozzi announced plans to bring in a consultant to help the finance department make the necessary corrections. During May and June, he and Finance Director Dawn Norton completed a request for proposal and interviewed companies, settling on Blum Shapiro.
"We know Dawn is trying to correct issues from the past, run the finance department, and plan it going forward," Mallozzi said at the Board of Selectmen meeting, explaining that the department is running at full capacity without having to create new protocols and procedures. "We have money in the contingency budget, let's take that money. I think we're all on board with this."
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The money will come from a transfer of funds, which were originally appropriated as contingency for projects in the budget last year but weren't needed during those projects. Because the RFP and interviews took place before the first day of the new fiscal year on July 1, the funds come from last year's budget, before those otherwise unexpended funds would be swept back into town coffers.
The firm will produce workflow charts and a complete policies and procedures handbook for the department, something Mallozzi noted is lacking. In May, Mallozzi introduced the idea of the need for the consulting help. He said then the audit and management letter had shown that a lot of work still needed to be done.
"I think it's obvious we don't have the manpower to get all this done," Mallozzi said at the May 8 Board of Selectmen meeting. "It will give Dawn help in creating a document so there's something in place that says, `this is the way we do things in the town of New Canaan.' It's a lot for her to craft."
Mallozzi has also lamented at the improbability that such documents had not previously existed.
"We literally want to map and create workflows and look at what the processes are now," Jeffrey Ziplow, a partner at Blum Shapiro, told the Board of Finance. "I suspect we're going to find some control weaknesses and I want to find them and create better controls and better oversight."
The proposal was met mostly with support.
"I think this is just another example of our town upgrading the way we do business," Selectman Nick Williams said at the selectmen meeting. "We've made incredible progress in the last few years."
Some others wondered if a $60,000 expenditure was completely necessary, given that the errors in procedure and a basic suggestion for improvement were already provided at length in the management letter.
"That's a good point," John Sheffield of the Board of Finance said. "The management letter gave a list of items with some explanation, but we need to take it a step further and dig into some of the policies ... The town finance department is just trying to get through daily functions, we need this outside firm to set up best practices."
Norton said the whole process should take about 12 weeks.
Some members of the Board of Finance asked whether the firm would be able to contain the scope and whether it would need to bring in other consultants for other possible issues.
"They're a complete package," Norton assured the Board of Finance members. "We had three RFPs come in. They have every skill or knowledge."
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