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Archive for October, 2013

snapshots

There have been many, many items of correspondence back and forth between the Controller’s office, Council and my office regarding finances and reports from the Controller’s office. I offer the following to inform the rest of you as to the occurances over these past few years.

From: “Ann M. Thane”
Date: December 21, 2012 4:11:58 PM EST
To: Joseph Isabel , Valerie Beekman , Gina DeRossi , David Dybas , Richard Leggiero , Susan Alibozek , Ron Wierzbicki , Gerry DeCusatis , Ann Thane
Subject: FW: Accounting service engagement letter

All,

The City of Amsterdam has recently concluded its financial risk assessment process. The City shall take the necessary actions and steps to ensure its financial condition is properly stated and all current and future financial transactions are recorded correctly. An action plan has been developed, is in process, and will be updated as any anomalies present themselves in the data under review.

To date, the process has encompassed a partial review of the accounting transactions by various departments and sources (cash balances, capital projects, federal/state grants, current/prior fund comparisons, etc.) A review of operations by KVS, our accounting software provider, has also been conducted.

Darryl Purinton, our Financial Consultant, has identified areas of weakness requiring immediate remediation. It is apparent that prior year’s transactions must be addressed to ensure the integrity of data transitioned to the new accounting system.

The Mayor and Controller are requesting that the Common Council provide all necessary resources to address these inadequacies in an orderly fashion. Though the cost of assisting the Controller is escalating, our goal is to remediate and eliminate the weaknesses in the Department of Finance. This will be an evolving process that will perhaps take several months, reflecting the type and amount of problems that need attention. We must all ensure that this process is as expedient as possible.

The position of Deputy Controller has been submitted for advertising to local newspapers and will be posted online via several venues.

Please review the attached proposal and be prepared to discuss in committee before our first Common Council meeting of the year. Susan, will you please convene a committee meeting of the whole on January 2nd (6:30pm) and a resolution on for the night to bless off on this proposal?

Thanks, A.

—— Forwarded Message
From:
Date: Wed, 19 Dec 2012 11:57:00 -0500
To: Office of the Mayor
Subject: Accounting service engagement letter

Mayor

Please see the attached draft of an engagement letter for your review.

We can add or substitute tasks as you desire.

Some other tasks can include:

1. Review of the account coding for all cash receipts and disbursements and prepare correcting journal entries for all funds, except capital projects.
2. Review of the property tax receivable, liability and revenue accounts, reconcile them to supporting sub-ledgers and prepare correcting journal entries.
3. Review budgetary journal entries and reconcile them to Common Council authorization or lack thereof and prepare correcting journal entries.
4. We can look at other suggestions.

I look forward to your response.

Darryl

____________________________________________________________________________

From: Office of the Mayor
Date: Tue, 15 Nov 2011 11:00:41 -0500
To: Heather Reynicke , Ann Thane , Gerry DeCusatis
Subject: AS400

Hi Heather,

Will you please let me know where we stand with the AS400 and the County? We need the single password for all users, but still need the county to figure out why we are being dropped. We don’t have any other trouble with the network connection, i.e., the internet or red alert. Something must have happened during the floods to their server. This problem has greatly affected the the codes department’s ability to work with this system. I’d appreciate you trying to get to bottom of this situation.

Will you be at tonight’s meeting? I’d appreciate an update as to where we are with the software transfer, contingency funds, processing of purchase orders and the fund balance. Departments heads at yesterday’s meeting are concerned as they are not getting updates as to where they stand within the budget. Of course, each department tracks their time and expenditures, but it seems the checks and balances are not in place at this time. They’d also like to have KVS review the system with them so that they may suggest what is necessary to meet their unique needs.

Lastly, once a new controller is in place, I’d like to work on a plan of transition. Hope you are well on the mend. Thanks, A.

Mayor Ann M. Thane
City of Amsterdam
61 Church Street
Amsterdam, NY 12010

From: Office of the Mayor
Date: Mon, 19 Sep 2011 13:01:57 -0400
To: Heather Reynicke , Gerry DeCusatis , Ann Thane
Subject: Updated conversation

Hi Heather,

Just to recap a few of the items we discussed:

• we may need additional bonding to address asbestos remediation/demolition of the Esquire Building
• we need your recommendation as to whether we bond for emergency services rendered after the two floods
• we have not heard from a FEMA representative yet, but I have forwarded the FEMA application handbook for your review. Hopefully, you have reviewed the emergency purchasing policies with each department (per 9/1/2011 email)
• outstanding invoice: Municipal Solutions – please call
• staffing concerns
• conversion: postings, reconciliations, payroll accruals
• URA transfer
• disaster relief local law: wave user fees; please discuss with Gerry
• please advise the council as to the proposed cut of all departments by 1%
• resolution #11/12-42

There are a few other concerns we must attend to. I sent you the email concerning the actuarial review and retiree heath benefits.

I’ve looked over my ever-evolving task list for all departments and note the following open issues where your office is concerned:

• auction of old equipment
• AUD comes due November 1 (who is tending to this now?)
• Audit Masters/Time Warner audit
• S&P requirements: did you check with bond counsel to determine if we need to file required notices?
• Electronic payment form: US Congress submitted?
• computer/phone outages – need contact info/structure set up for when you’re not here
• demolition money: please square accounts with Roseanne

Lastly, we should have a plan to pass of responsibilities in December. Both of us may be gone and I want to make the transfer as smooth as possible. To that end, we will need a clear picture of:

• fund balance
• debt/capital project tracking (who is making debt payments while you are out?)
• reconciliations
• the status of the general ledger, year-end accounts payable/receivable

This is a lengthy listing of concerns and I know you are on top of much of it, but as we wind down this year, I’d like to feel that we are in control of every eventuality.

I hope your recovery is much faster than anticipated. Best wishes, A.

Mayor Ann M. Thane
City of Amsterdam
61 Church Street
Amsterdam, NY 12010

Controller’s Response:

—–Original Message—–
From: Heather Reynicke
Sent: Fri 9/23/2011 6:55 PM
To: Joseph M. Isabel; William D. Wills; William D. Wills – External
Email; Julie Pierce; Gina DeRossi; Richard Leggiero; jmiwcss@verizon.net
Subject: Finance Update

Dear Common Council,

Below please find answers and updates for all of the Mayor’s concerns.
Please note that this laundry list are only a few things that are
currently happening in the Controller’s Office. This list only entails
the items that the Mayor and I personally discussed on September 19th,
if it were not for that conversation, she would have no knowledge of the
daily on-goings in my office.

As you all know, I am the Chief Fiscal Officer of the City and the Mayor is the Chief Executive Officer. Each one of us having no control over the other. Although we must work together to be able to run the City responsibly, I see no concerns with any of the below listing.

The Mayor states the reason for her concern is based on the following from the Charter:
“To keep the Council fully informed at all times of the financial condition and needs of the City and to recommend such measures as he deems necessary to assure and protect its fiscal integrity.”

Ninety percent of these “concerns” the Mayor has do not hinder the fiscal condition of the City. Therefore, I find her request unwarranted and frankly none of her concern.

The only reason I am responding to her request is to inform the Council that I am working my hardest to complete all tasks but certainly cannot guarantee that they will all be completed before I leave.

I am in constant contact with my office for hours each and every day. I also am in contact with Audit Chairman Bill Wills for any concerns that arise with the audit.

Regardless of my absence, functions in my office are being completed.

Please let me know if you have any questions or concerns.

The following are my responses to the Mayors concerns:

we may need additional bonding to address asbestos remediation/demolition of the Esquire Building
I would need more information in order to request for a
resolution for more funding. Ie: dollar amount and specifics of
expenditures

we need her recommendation as to whether we bond for emergency services rendered after the two floods
The only recommendation I can make is that the City bond for
these expenses, in hopes that FEMA will reimburse costs. Fund balance
cannot be used, and the Contingency account has been nearly depleted
from overtime expenses.

we have not heard from a FEMA representative yet, but I have forwarded the FEMA application handbook for Controller’s review.
This is the Mayor’s responsibility as the Chief Executive Officer. All departments effected have already submitted cost estimates to myself and the Mayor.

Hopefully, she has reviewed the emergency purchasing policies with each department (per 9/1/2011 email)
The emergency purchasing policy exists within the recently updated Purchasing Policy that the Council has authorized. Each department head has received and hopefully reviewed the document since they are responsible for any purchase they make. As the Chief Fiscal Officer, is is my job to enforce the policy. Some departments have contacted me and I answered any questions they had. Any other departments can contact me if questions still exist.

outstanding invoice: Municipal Solutions – please call
Municipal Solutions has been paid, except for invoices related to contractual financial planning expenses. Invoice submitted from Municipal Solutions total well over the contracted amount of approximately 3,000. I have questioned the cost with them and am waiting for a response.

staffing concerns
I addressed the Council in executive session this week regarding staffing. I see no concern here.

conversion: postings, reconciliations, payroll accruals
Conversion is still being completed, as records need to be accurate before converted to the new system. Daily reconciliation is performed for all monies received and disbursed.

URA transfer
This was never a concern, completed.

disaster relief local law: wave user fees; please discuss with Gerry
This is the Council’s concern, I can only provide an estimate of revenue reduction it would cause.

please advise the council as to the proposed cut of all departments by1%
This is also Council initiated. I did provide a starting point, which is my recommendation, by cutting departments by percent make-up of the entire budget. I provided this to you at the September 6th meeting. It is up to the Council to move forward with this.

resolution #11/12-42
I am not sure what this resolution is since I am home.

Additional concerns:

foreclosure
The foreclosure process has been initiated and will be ongoingfor months to come. The new Controller will have to take this task over midstream as the process requires time lines to be followed.

AUD comes due November 1 (who is tending to this now?)
This is being tended to by my staff, as always done in the past. I may be requesting an extension due to the fact that conversion is not completed, and when it is, the compilation will be much easier to complete. In the past, it took the principal account clerk anywhere from 2 to 3 weeks to complete.

Audit Masters/Time Warner audit
This is the Mayor’s responsibility as the Chief Executive Officer and signer of all the contracts. Concerns involve litigation for these issues.

S&P requirements: did you check with bond counsel to determine if we need to file required notices?
Bond Counsel has been e-mailed. Awaiting reply.

Electronic payment form: US Congress submitted?
I am not sure what this request is for.

computer/phone outages – need contact info/structure set up for when you’re not here
I am not the IT person for the City. The Mayor needs to find someone to address these concerns. This is not my responsibility, but have been addressing all IT concerns due to the fact that no one else was willing to perform the functions.

demolition money: please square accounts with Roseanne
I believe Rosanne has been notified of all accounts months ago.

auction of old equipment
I do not handle this, and never did. Ray Halgas manages the sale of equipment and always has. It has come to my attention of a matter regarding the unauthorized sale of equipment from the Gold Coarse. I advised the Mayor and Corporation Counsel of the matter and the employee performing the action. To my knowledge, the employee has not been reprimanded. The only involment my office does have is collection of monies on the day of auction and recording disposal of such asset.

insurance trust
Is there a specific question here? The trust was not passed by the County, therefore, not passed by the City.

We need a plan to pass on responsibilities in December to make transition as smooth as possible.
To that end, we will need a clear picture of:

fund balance
Fund balance is approximately $600,000 as previously notified. debt/capital project tracking (who is making debt payments while you are out?)
Debt payments are made automatically and posted to the accounting system by the Principal Account Clerk.

reconciliations
Reconciliation is performed by the Principal Account Clerk, daily.

the status of the general ledger, year-end accounts payable/receivable
The general ledger is updated daily.

As previously stated, please do not hesitate to contact me with any questions or concerns.

Thank you,

Heather Reynicke
____________________________________________________________________________

From: Office of the Mayor
Date: Thu, 3 Feb 2011 12:22:10 -0400
To: Heather Reynicke

Subject: Tasks

Are 2010-2011 opening balances brought forward?

Are you satisfied with the FYE 2010 AUD versus the AUD?

Has the 2010 BOND issue been reconciled and posted?

Are all current Chapter 13 claims filed and recorded?

Is the GL. etc. for the Capital fund up-to-date and in balance?

Are all NSF checks satisfied, including the really old ones which Gerry will have to help with?

Have all debt payments been made and duly recorded?

Has the budget been reconciled with the GL monthly? Is it in balance?

Has the PFY health been reconciled? Does the MCH Trust still owe us money?

Have the county and school been paid on there receipts for October, November and December, 2010?

Are the most current few years of tax receivables reconciled?

Has the spring, 2010 auction/sale been finalized with entries made?

Has the County been paid on the auction results(including entries in our system to reflect it)?

Have adjustments been made to the Trust fund to bring it into balance?

Have monthly health insurance payments been reconciled and posted?

Has the Riverfront Pollution Insurance policy been renewed and recorded?

Has the calendar year liability insurance been paid and recorded?

Are all grants recorded and accounted for?

Are EFC monies recorded and budgets adjusted accordingly?

Is the AURA GL up-to-date and reconciled, and have they received all required reports including loan status and cash balances?

—— End of Forwarded Message
____________________________________________________________________________

Please note the following as well, posted here on my blog:

no good is good news

Posted on June 27, 2009

Saturday starts with sensation: DEFICIT! SPENDING! AUDITORS! The local paper eagerly posts headlines that compel the reader to believe the ship has gone down and all that remains is a slight stream of steam and bubbles. The story is disappointingly one-sided, given that along with audit findings from the Comptrollers office (OSC), the paper was provided with the City’s immediate response to this report.

The untold story is that the Council had been made aware of the excess in expenditures months ago (some contract-driven and some by necessity) and that my administration has been working with a representative funded through the OSC for the past year to identify long-standing deficiencies in operations. Truth be told, the Council was presented with a comprehensive proposal to address our challenges BEFORE the OSC issued its findings and I am hoping for support of this initiative at the next CC meeting.

As I have stated before, I am grateful to the OSC for coming to the City early in my administration (arriving last summer and on-site until May) to conduct policy, procedure and budget analyses that will allow us to better our fiscal oversight and budgeting. Their recommendations concur with our internal assessment of operations over the past year and I am gladdened that we may meet the challenges we face proactively with a strategic plan of action that we may implement immediately.

The proposal presents an improved way for the City of Amsterdam to manage expenditures to avoid overspending. We will provide timely, clear financial management tools for the aldermen, the mayor and department heads. We will develop long-term fiscal policies, financial goals and operating plans, along with a strict expenditure discipline.

The specific work plan and timeline are as follows –

Revenue and Expenditure Tracking:
Months 1-2:
– Devise a simple, clear and informative monthly budget tracking report and fiscal impact statement for each financial action before the Council;
Months 2-12:
– assist department heads in the production of these tracking mechanisms to present to the Council at our bimonthly meetings.

Spending Controls:
Months 1-3:
– Develop a simple revenue and expenditure cash flow analysis;
Months 3-6:
– devise a simple, concise system that compares cash flow with the budget tracking report;
Months 4-12:
– manage spending by using the cash flow/budget tracking comparison system.

Budget Analysis:
Months 1-3:
– Conduct historical analysis of the last five years’ budgets, actual collected revenues and operating expenses;
Months 4- 6:
– comparison of current years’ budget with historical analysis;
Months 5-8:
– projection of next three years’ revenues and expenses.

Improved Budget Process and Format:
Months 6-9:
– Devise a simple, clear, and informative yearly budget presentation format;
Months 7-11:
– assist department heads to implement the reformatted document;
Months 11-12:
– compare proposed 2010-11 budget with historical budget analysis.

The financial challenges of the next few years require that the City begin this year-long financial control process now. I am pleased that we have been actively working toward taking this necessary action immediately and the state auditors responded very positively to our plan when I met with them on Friday morning. City Comptroller Heather Reynicke has already identified several avenues to fund this initiative in closing out this year’s budget. Our consultant’s credentials are exemplary, touting practical, hands-on management and operations experience at municipal, county, state, federal and international levels. Surely, $2,500 a month is worth spending to ensure that we are protecting the best interests of our constituents in managing a $23 million dollar business. I am certain that our Council takes its fiduciary responsibility very seriously and will respond to this challenge for the opportunity that it is.

May calm, rational thought rule the day.

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golf-hole-with-ball1

The following is my veto of the Golf Pro contract in 2008. Most of the concerns I had then still exist. For this council to push forward with extending this contract for another three years would be wildly irresponsible, especially given that there is an RFP out now asking for proposals to take over these duties and more.

Our responsibility is to the 18,680 people that live here, not special interests.

“VETO STATEMENT • Resolution 08/09 – 147
November, 2008

I am vetoing the resolution because it does not protect the interests of the taxpayers of the City of Amsterdam.

Earlier in the year, I forwarded a resolution to provide for greater oversight and control of operations at the Golf Course. Even though the Council chose not to make my suggested changes, it is still the responsibility of elected officials to protect one of the greatest assets of the City of Amsterdam.

This contract, which was never reviewed or discussed as a Committee of the Whole Council, undermines the City’s ability to modify operations at the Golf Course, adjust for changing financial conditions, and implement long-range planning.

I cite the following items that are detrimental to the City’s interest:

– The term of the contract changes from a three-year term to a five-year term. This will prevent the City from benefiting from potential golf cart rental income and lock the City into the existing operations of the course.

– The contract gives the Pro a 23.6% raise (includes compensation for a Ranger. Without the additional employee, this would equate to a 13% raise.) Compensation will increase by another 2% over each of the next four years. City employees are held to a 3% raise per year.

– Retail space for the Pro Shop is rent-free for the five-year term of the contract. Electricity is free as well. All profits from the sale of equipment, supplies and accessories go to the Pro.

– The contract stipulates that the Pro submit a business plan, financial statements, a current balance sheet, and income statement to the City for review prior to the awarding of the contract. The business plan was included and states that the explicit objective of the plan is “to market the Golf Course and Pro Shop in order to promote business.” There were no real marketing incentives included in the plan beyond publication of tournaments on “bulletin boards and the local papers” and it lacked financial analysis completely. Most of the “plan” is merely verbiage that has been copied and pasted from the contract. The rest of the required financial information was not included in the contract.

– The contract changes wording that the Pro shall obey all reasonable orders and directions of the “Mayor” to “Golf Commission.”

– The contract directs that the Pro shall assist in the promotion of the the Course, but “promotion” is not defined.

– As was the case in the past, the Pro must publicize tournaments on bulletin boards and in local papers, but there is not stipulation that proof of these efforts be produced.

The Pro owns twenty carts for rent to golfers. All profits from the rental of carts go entirely to the Pro. We don’t know how many rentals there are in a season, because though they have been required since 1985, financial statements have never been produced. We do know that there are approximately 40,000 rounds of golf played a year. If only 10% of those rounds of golf involve rentals at $20 a pop, that’s $80,000.

– The pro stores the carts over the winter at no cost.

– Lastly, the final line in the contract is incomplete, stating it “needs to be added.”

The list above is what I’ve picked out when comparing this contract with the last contract. On top of all of this, we have no solid financial reports as to how the Course did this season, no projected budget and no plan to address debt of upcoming capital projects.

It would be prudent to have a shorter-term contract pending the development of long-term plans for the Course. I therefore veto this resolution.”

$80,000 + the proceeds from the Pro Shop + no storage, lease or utility costs + $25,000 for 6-7 months of work = a pretty good clip in the City of Amsterdam.

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