Audit finds three years of dog license payments

More than $10,000, much in checks that are void, went undeposited

PUTNEY — The town has failed to deposit more than $10,000 collected from dog licensing fees for three years, according to an audit of town finances by Montpelier-based accounting firm Mudgett Jennett & Krogh-Wisner PC.

According to the audit for the town's fiscal year ending in June 2014, approved at the Jan. 7 Selectboard meeting, the town owes approximately 30 percent of that total to the state.

The board approved paying those fees, which will be covered by depositing the payments from 2014.

To further complicate matters, a majority of the undeposited revenue is in the form of checks, most now well past their void date.

The town will ask residents to resubmit their dog license fees from past years and chalk it up as a clerical error. According to the management's response in the audit, Town Manager Cynthia Stoddard reported that she and Town Clerk/Treasurer Anita M. Coomes “will come up with a plan to collect or write off the FY12 and FY13 collection of dog licenses revenue.”

The lapse in internal control over financial reporting will cost the town at least $3,000, and possibly thousands more.

An escalating problem

When Selectboard Chair R. Scott Henry asked how this issue could have persisted for three years and not been noted in last year's audit, Stoddard said that the issue was brought to the town's attention by auditors informally every year.

For the first two years, Stoddard had kept track of the revenue and state fees, but Coomes had not “gotten around” to depositing the money.

Last year, no information was officially recorded in the financials regarding dog licensing; this escalation led the auditors to take note of the “significant deficiency.”

Stoddard told The Commons on Tuesday that because the town clerk/treasurer is an elected post, as a town employee, she has had no authority over the situation.

New procedures

The dog licensing process is one of only a few that are not incorporated into Putney's computerized cash receipt software. This aberration played a significant role in the long-term lack of follow-through with this explicit revenue stream.

As suggested in the auditors' findings, the Selectboard unanimously agreed to transition the dog licensing process into this system so it can be properly collected, tracked, managed, and deposited.

“We recommend that the town adopt additional controls over the dog license fees such as separating the accounting and reporting duties from the licensing and fee collection duties with an adequate reconciliation between collections, deposits, and reports,” the audit reads.

When the topic of culpability reached the table, however, board members acknowledged that a loss of taxpayers' money would hold the municipal government responsible.

The scale of that loss will be determined by how effectively the town can solicit repayment of two-year-old dog license fees, largely based on a stack of stale checks.

Cemetery questions

The licensing fees issue was one of two “findings,” or notable deficiencies in internal control over financial reporting, the metric used by auditors to assess the likelihood of financial mistakes being made, caught, and/or fixed by municipal government.

These deficiencies often relate to the systems and procedures in place that manage the range of municipal revenue streams, and can be as specific as, in this case, how the town processes its dog licensing fees.

The other finding regards town cemetery funds.

According to draft meeting minutes, “there are approximately $51,000 in funds restricted to cemetery, and the auditor has been asking for information for a few years regarding what those funds may be used for.”

Cemetery Commissioners Kathleen O'Reilly-Lawrence, Quinn O'Reilly, and Tiffin Mabry must sort through the records and “come up with a policy by June 30, 2015,” the end of the fiscal year.

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