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Beyond miffed at county budgeting

January 3, 2014
By Edward Murphy

The Enterprise recently reported that the Franklin County manager, Thomas Leitz, is "miffed." Well, I'm miffed, too. We all should be miffed - but for a different reason.

Mr. Leitz is miffed because on Dec. 13, the Office of State Comptroller sent him a letter concerning a new audit of the county's social service programs ("Reimbursement of Social Services Costs").

The letter stated that the county failed to seek reimbursement on almost $458,000 of program expenditures to which it was entitled. (Fortunately for the county's bottom line, the letter added that this amount was reduced by some $34,000 in overbillings and inappropriate reimbursements.) According to the letter, the net amount involved represented up to $343,171 in additional county revenue - funds that could have been used to improve the county's fiscal mess.

The letter attributed the loss of reimbursement revenue to the county's failure to have in place a standardized billing process across its social services departments, as well as its failure to periodically monitor the administrative costs of the programs involved.

I, on the other hand, have been miffed at the Franklin County Legislature since Oct. 4, when the OSC released a scathing audit of Franklin County's finances ("Franklin County Fiscal Stress").

This audit found that the Legislature failed to adopt realistic and sustainable budgets, routinely drained reserves to finance operations, didn't maintain adequate levels of surplus funds, and didn't develop comprehensive, multiyear financial and capital plans. The county's cash balance was so depleted that it even took out a "payday loan" of $4 million just to pay its bills on time. The audit concluded that "these declining trends could result in fiscal instability if allowed to continue" - an accounting euphemism for financial meltdown.

So in the course of a couple of months, we have separate OSC audits finding that Franklin County is unable to perform two of its most basic, yet important, responsibilities: competent and prudent budgeting, and getting the most revenues allowable in order to keep the taxes on county residents as low as possible. Put another way, OSC has found that the county, in effect, drove us into the financial ditch and then failed to claim some of the money needed to get us out.

It's fair to say I'm beyond miffed.

In a Sept. 30 letter to OSC on the "Franklin County Fiscal Stress" audit, Mr. Leitz essentially conceded the audit's accuracy, saying, "We do not principally disagree with the audit findings and acknowledge the financial problems facing Franklin County."

However, in a Dec. 26 Enterprise report, Mr. Leitz launched a vigorous attack on the "Reimbursement of Social Services Costs" audit. I confess that I had considerable trouble following the Enterprise report.

But I did get the point. Mr. Leitz found the audit "misleading." Although he admitted failing to obtain all of the reimbursements, he stated, "In the final analysis, we were able to claim for $52,248 - a far cry from what was cited in the audit."

I can appreciate Mr. Leitz's interest in stanching the public miff-dom over this latest financial embarrassment. However, his one-sided recitation of events and unsubstantiated conclusions in the Enterprise does little to enlighten the public about how the county got where it is, and how we can move forward from there.

I, for one, would prefer to withhold judgment on both of these audits until OSC's usual process for resolving audits has played out.

This process has two elements. First, the subject of an audit is invited to comment on each of OSC's findings and recommendations. These comments - along with OSC's response to them - are made available to the public.

Second, OSC invites the subject of the audit to submit a "corrective action plan." The plan must address each point in the audit as well as any proposed corrective actions. If no action is proposed, the subject must indicate the reasons why not. This information is also made available to the public.

This process provides the public with the fullest information with respect to an audit and offers the public the best opportunity to assess its accuracy, as well as the adequacy of the corrective measures that are proposed. I hope the county will seriously engage OSC in this effort. County taxpayers deserve nothing less.

I realize that Mr. Leitz is the point man on the social services audit and that some of the blame may rest with Franklin County's operating departments, but let's be clear about where the responsibility for the latest chapter of the county's fiscal mess lies.

Under New York state law, the Franklin County Legislature - more specifically, the seven-member Franklin County Board of Legislators - is solely responsible for the actions of the county's manager and operating departments. So if you're as miffed as I am, they're the ones to contact.

Finally, the 2014 county budget overrides the 2 percent property tax cap by 5 percent. Mr. Leitz points out that after the override was adopted, Gov. Cuomo's Tax Relief Commission proposed a tax credit equal to the growth in property tax, but only if the county stayed within the 2 percent tax cap. If this suggestion is finalized, county residents would not only have to pay the extra 5 percent tax levy but would be further penalized by having to forego the tax credit.

Mr. Leitz blames this turn of events on OSC, stating that "the justification for exceeding the cap was largely driven by the comptroller's ('Franklin County Fiscal Stress') audit" and that county residents would lose the rebate because the county accepted "the recommendations of the state comptroller."

There will certainly be blame for this further outrage to county taxpayers, but the blame rests squarely on the shoulders of the Franklin County Legislature. Indeed, if the county had been following prudent budgeting practices over these many years, there would have been no need to override the cap for 2014 and, therefore, no loss of the rebate.

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Edward Murphy lives in Vermontville.

 
 

 

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