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6/18/2009 - New Audit Shows Hamilton is Moving in the Right Direction

In summary, while existing economic conditions will continue to wreak havoc on municipal budgets for the near future, the Council and taxpayers should find comfort in the fact that the Township is once again operating in accordance with the various fiscal rules and regulations prescribed for municipal government, and that financial reporting is fair and accurate. – Robert S. Morrison, Independent Auditor, Certified Public Accountant and a Registered Municipal Accountant

 

 

 

New Audit Shows Hamilton is Moving in the Right Direction 

 

Audit Praises Financial Controls Put Into Place by the Bencivengo Administration 

 

 

(Hamilton) – The latest audit of Hamilton’s Township finances becomes a second, significant indication that the Township’s financial condition is moving in the right direction under the administration of Mayor John F. Bencivengo. 

 

Following the Township’s release from State Supervision last month, which was over a year ahead of schedule, the new audit is another illustration that the efforts of Mayor Bencivengo and current Township Council have restored fiscal integrity to Hamilton government, after inheriting a disastrous financial situation on January 1, 2008.  

 

The period of the audit was for the Township’s Fiscal Year 2008, which ran from July 1, 2007 through June 30, 2008.   This period covered the first 6 months of Mayor Bencivengo’s administration and the last 6 months of former Mayor Glen D. Gilmore’s administration. 

 

One section of the audit noted the distinct differences between the two portions of the fiscal year under each administration.  Under the administration of former Mayor Gilmore, the audit stated the following:

 

During the period from July 1, 2007 through December 31, 2007, management consisted of essentially the same group of individuals as were in place during the prior fiscal period.  During this period of time, the control deficiencies noted in our prior report continued essentially unabated.

 

That prior audit (for Fiscal Year 2007) reported 65 violations of public contract law.  Additionally, approximately 90 violations of public contract law were report in the audit year before that (Fiscal Year 2006).

 

In a June 10, 2009 letter accompanying the latest audit, Auditor Robert S. Morrison, a Certified Public Accountant and a Registered Municipal Accountant, elaborate further on the past two audits of the former Gilmore administration.  

 

As you may recall, we issued an adverse opinion on the Township’s financial statements for the period ended June 30, 2006, based upon the prior [Gilmore] Administration’s refusal to acknowledge a $1,057,000 overexpenditure and their rejection of our proposed audit adjustment.  During this time period, the Township was forced to restate its Current Fund reported surplus (fund balance) from $6.5 million to $3.3 million to correct an accounting error made in the prior year. 

 

We were unable to issue an opinion on the Township’s financial statements for the year ending June 30, 2007, due to the failure of the prior [Gilmore] Administration to acknowledge their responsibilities for those financial statements.   Those financial statements reflected an additional $6.2 million of overexpenditures and expenditures without a legal appropriation of funds occurring during the year under review.

 

In contrast, the new audit presented by Morrison noted the positive changes under Mayor Bencivengo’s administration:

 

A new [Bencivengo] Administration took office on January 1, 2008.  We noted that upon his appointment in January, 2008, the Acting Business Administrator began enforcing “best practices” designed to bring the Township into compliance with applicable laws and regulations.  These included significant remedial efforts, including the preparation of resolutions awarding contracts based upon bids, use of state contracts, and statutory exceptions to the Local Public Contracts Law.  As a result, and as indicated in the comments which follow, compliance in this area improved dramatically.

  

In his accompanying June 10th letter, Morrison further qualified his comments, stating:

 

As auditors, we appreciate the significant efforts made by the current [Bencivengo] Administration, upon taking office at the mid-year point in this financial reporting cycle, to rein in the rampant noncompliance and statutory violations noted in our previous reports. While these efforts are ongoing, we noted vast improvement in both the emphasis on internal control and the effectiveness of operational controls during the period from January 1, 2008 through the close of the fiscal year.  We are also pleased to report that we noted no management overrides of existing internal controls subsequent to January 1, 2008… 

 

The latest audit specifically noted improvements made under the first 6 months of Mayor Bencivengo’s tenure that addressed various financial issues noted in prior audits:  

 

·        The appointment of a new Purchasing Agent, which re-centralized the Purchasing Process

·        The forwarding of information related to quotes for Township services to the Purchasing Agent for review, verification and approval

·        Corrected financial practices for the Township’s Dedicated Uniform Construction Code Trust Fund, such as including construction permit fees and costs of the Township’s Construction Code Office and Office of Housing in the Township’s operating budget  (which was done in for the FY2009 Township budget prepared by Mayor Bencivengo’s administration)    

 

"This audit is another concrete example that illustrates the disastrous financial situation our administration inherited and clearly shows that the reforms we have implemented so far have put Hamilton Township’s finances back on the right track," summarized Mayor Bencivengo.   "We are moving ‘America’s Favorite Hometown’ in the right direction and will continue with strong financial controls and proper accounting procedures – which Hamilton taxpayers desire and deserve from us."