Not long ago my fellow Town Council members and I voted to make public a risk assessment of municipal operations for the current administration.
This assessment was initiated in direct response to a town theft of over a quarter of a million dollars that occurred in 2017 and 2018. This theft was undetected by the current administration for an entire year due to lack of government oversight and failure to implement safeguards to protect the taxpayer. To this day, we do not know the source of the exposure, yet the amount of the theft continues to evolve as more details of the criminal case emerge.
When the Town Council became aware of the theft, an independent auditor was hired to complete a risk assessment to identify issues within the current administration’s handling of town finances.
Due to the current administration’s inability to locate essential records, the audit results were delayed several months. After a long wait, the findings are alarming.
Of the eight areas audited by the firm, every area evaluated had a significant risk identified. In fact, over 62% of the entire audit indicated the financial operations of the town are high risk. There are no formal, documented policies for internal controls and no accountability of what and how procedures are performed. There are no segregation of duties and there is no financial or internal control trainings offered by the current administration.
I urge every single resident to read this report. All residents in town should feel confident that our town is evolving effectively to respond to criminal acts. The independent report indicates a high susceptibility of fraud in our banking, financial reporting, and information technology. The auditors are now recommending that a secondary risk assessment be conducted of our IT systems due to the increased risk. After reviewing this report, there is no surprise that a theft of this magnitude was able to occur without detection for such a long period of time.
We need to invest in modern, standardized policies and procedures to safeguard the town. If we do not invest in these technologies immediately, we will continue to incur thefts and breaches into town accounts. We need to develop standardized operating procedures, mandate training for employees, and work in partnership with state and regional authorities to ensure continued training of town employees on risk exposure. Additionally, there needs to be a top down evaluation of duties being performed by employees and changes need to be implemented to ensure oversight and accountability.
Approximately $40,000 of taxpayer monies was needlessly spent on this audit when all of these reforms should have been implemented years ago. Now another risk assessment is being recommended, with additional costs, all while the theft that occurred three years ago is still pending before the court. All while no insight into the actual source of the breach has been identified.
We are continuing to incur unnecessary, legal fees over the lack of transparency and oversight of town operations by the current administration. This year alone we spent over $120,000 on legal fees and are projecting the same for next year due to all of these issues.
Change is needed now and reforms are essential to the financial stability of this town.
Kevin O’Leary is a mayoral candidate in the Town of Prospect.