​Grand Isle moves forward seeking town audit proposals

By MIKE DONOGHUE
Islander Staff Writer
GRAND ISLE -- The Grand Isle Selectboard has voted 3-2 to seek requests for proposals from accounting firms to provide a comprehensive audit of town books.
The move came during a special meeting on Monday night to discuss a response to a petition the Selectboard received in mid-April signed by more than 150 community members seeking a review of the financial records for the past three fiscal years.
The petition noted taxpayers were concerned the Grand Isle Selectboard members have never received the state-mandated quarterly financial reports from the town treasurer for several years.  The petition also asked for a forensic audit.
Selectboard Chair Jeff Parizo, who was delegated to develop a request for the town to seek bids from accounting firms, said he studied similar proposals for other towns in Vermont.  He developed a 3-page proposal for accounting firms to respond to if interested.  
Nobody has made any claims of criminal misconduct in Grand Isle.  Grand Isle Treasurer Melissa Boutin, who is elected, has said she will answer any questions and that the town books remain available for inspection by the public.
Boutin attended the special meeting this week, but did not offer any thoughts or concerns.
Selectboard members Diane Cota and Adam White voted against the motion without offering any reasons initially.
Local resident Bianca Adams questioned why Cota and White voted no.  Somebody could be heard on the Zoom meeting whispering that the two officials did not have to answer the question.  Both eventually questioned the need for the review in light of an annual audit Grand Isle had received from RHR Smith & Company of Buxton, Maine, which has done the books since about 2016.
Cota said Boutin was unaware of two state statutes about dealing with reports and finances.
The Selectboard did receive recently from Boutin a draft of the latest quarterly report.
 The petition also questioned how town investments are handled.  The petitioners noted the Selectboard has oversight on investing town funds.  Boutin has acknowledged she moved town money into certificates of deposit without board approval to try to attract slightly higher interest rates.  She said she has stopped doing that.
Former Selectboard Chairman Ron Bushway noted several Vermont towns, including Coventry and Hardwick have had audits conducted, only to learn later that there were major mistakes.
He noted last month the certified public accounting firm of Kittell, Branagan & Sargent of St. Albans reached a $960,000 settlement with the Hardwick Electric Company because the CPAs failed to uncover any trace of a more than $1.6 million embezzlement over 10 years.
KB&S had audited the utility books from 2006 to 2010 when most of the money was taken, officials said.  The Hardwick Electric office manager eventually went to federal prison for fraud.
The town of Coventry is missing more than $1 million, but no criminal charges have been filed, records show.
Parizo stressed during the meeting seeking requests for proposals would not cost the town anything now.  He said based on the responses received, the Selectboard could take further steps and decide to spend money, if warranted.
Parizo said the town has been dealing with the audit question for about three months and he wants to get to the bottom of the concerns and move on.  He said he has been given the names of six accounting firms that specialize in municipal audits.
“We should have done this a long time ago,” said AnnaMarie DeMars, vice chair of the Selectboard.
DeMars also repeated comments from earlier meetings that she had tried to push for a full audit when the town changed elected treasurers.  She has said that is standard in most Vermont towns and it provides protection for both the outgoing treasurer and incoming treasurer should a problem later surface.
She noted the late Fay Chamberlin, the longtime Grand Isle Town Clerk and Treasurer, was “adamant” about having a full audit during any transition in the treasurer’s office.
Mitchel Richardson, a local property owner, asked about how Grand Isle went about hiring the outside auditing firm.  Parizo said his recollection was the town’s former accounting firm was getting out of the municipal business in 2016 and Boutin proposed RHR Smith & Company.
The other four Selectboard members and Boutin did not dispute that narrative.
Richardson said it did appear the town failed in its due diligence at the time.
Parizo agreed.  He said the Selectboard at that time should have hired the outside auditor -- not the town treasurer.
Cota did ask how much the town had in its “rainy day fund” to possibly pay for the audit, but Parizo said that was premature because no spending was being requested at this time.
Richardson said he did not understand the reluctance by some board members to send out the request for proposals when it would not cost taxpayers a penny to get information.
White later challenged Parizo to put a motion on the floor about seeking the request for proposals.  He obliged and DeMars seconded the motion.  Selectboard member Eric Godin later joined with them to approve the motion and move the process forward.
Adams said Mark Cobb, who served on the Selectboard 2013-2017, brought up the lack of quarterly reports at the time, but got nowhere.
Richardson had said at an earlier meeting a review of meeting minutes appeared to show the Selectboard stopped getting the quarterly reports in 2012.   He maintained the Selectboard should not be “begging” for financial reports.
Cota also questioned the length of the audit proposal.  It seeks bids for the past three fiscal years, but also could go back up to another three years.
Parizo explained if something was found amiss in the three-year audit -- 2018, 2019 or 2020 -- the town may want to be able to see if additional research was needed in 2017, 2016 or 2015.
Bushway said there has been a lot of talk in town about the audit and it would be good to determine if there are any problems.  If there is a problem, it can be addressed.
“If they find nothing, so be it,” he said.