Investigation finds Frankford financial procedures lacking

Frankford Town Council members have expressed by letter and in comments at the council’s regular August council meeting that they are “disappointed” in the state auditor’s report on its investigation into town finances.

The council received the 20-page report on the investigation, which was conducted at the council’s request, just hours before their regular meeting on Monday, Aug. 1.

Although Town Council President Joanne Bacon was absent due to illness, both Council Vice President Greg Welch and Secretary/Treasurer Marty Presley commented at length on the report.

In a joint letter to state auditor R. Thomas Wagner Jr. dated July 15, the council responded to the initial findings of the report. The letter stated that council members, while “most appreciative of and do not disagree with the majority of your findings, and have already incorporated many of these, there is a level of disappointment with a couple of issues that were specifically requested to be examined and appears to be left unresolved by this report.”

The response went on to summarize the reason the investigation was requested: “…The town’s administration, prior to September 2015, consisted of a town clerk and a council president, who were husband and wife. While there were other council members, these members were basically shut out of the decision-making process. This period lasted for well over a decade and as stated was an obvious conflict of interest. This period ended abruptly in August of 2015 with the resignation of both under unusual circumstances and hostilities.”

The council’s response letter went on to state that, following the resignations of town clerk Terry Truitt and town council president Jesse Truitt, “Many citizens came forward to express their concerns” to the new council members.

“These concerns covered a period of many years and alleged serious financial irregularities,” the letter said. It went on to say that the council “felt it was their fiduciary duty to engage your office for a complete and holistic review of the town’s finances for the 13-year period in question.”

Instead, however, the investigation covered approximately two years — the time between an earlier investigation by the Department of Justice and the auditor’s office, in which an investigator interviewed Terry Truitt, as well as council members and town residents/taxpayers.

At that time, the council letter stated, the only documentation reviewed by investigator Matt Towers was the payroll records of the clerk.

“With the clerk being on notice of the investigation and complaints filed at that time, the council again feels that a more comprehensive inspection dating back to 2008 would be more appropriate.”

The council’s letter also addressed alleged financial irregularities in cash transactions.

“The council brought to your attention several occasions where homeowners double-paid their property taxes and no record of refunds could be located,” the letter stated. The council stated that, while the auditor’s investigation report concluded that the town had “inadequate controls” for cash receipts, “We acknowledge this and in fact this was the primary reason for engaging your office.” But what was needed, the council stated, “was, and is, a thorough review of this and all cash management within that period of time.”

Meanwhile, the council listed nine steps it has taken to address the concerns about the handling of financial issues within the town administration. They include:

• Institution of an employee manual detailing employee benefits, procedures, rights and responsibilities;

• Division of responsibility for town departments among the town council members, including oversight of employees, department budgets and monitoring expenditures, with each council member reporting on these to the council president;

• Establishment of a charter and ordinance committee;

• Institution of use of an outside payroll vendor for payroll services;

• Reduction in cash transactions with town residents as much as possible by encouraging residents to make payments with checks or money orders, and the addition of an online payment option;

• An “aggressive” campaign by the council to reduce past-due accounts;

• New procedures regarding rental of the town park, including elimination of cash refunds;

• A new vacation and sick-pay procedure as of March 1, 2016; and

• More strict monitoring of overtime pay and the addition of time clocks in the town hall and police department.

At the Aug. 1 council meeting, Presley said that, since the council had just received the final report that afternoon, “an in-depth conversation is a little bit premature,” but he reiterated the council’s statement in their response letter that “We were a little disappointed” in the scope of the final report.

Presley added that he feels the council was “extremely blessed to go out in September and make wholesale changes” in the town’s leadership and staff, and to “move forward in a new direction” at that point.

There was also discussion on Aug. 1 about potential changes in the town’s charter as a way to maintain proper procedures within the town administration, during which resident Jerry Smith opined that “A lot that’s been going on here is more reflective of the council members, instead of the charter.”

“We know that there was nepotism, and there was conflict of interest,” Presley said. He added, however, that he believes the town’s charter needs to be tightened up to prevent future issues. “Every situation we get into, we trip over our charter,” he said. “I think we’ll eliminate 75 percent of our problem” with charter changes, Presley said.

“The charter definitely needs changing, and we’re working on that. But the charter also needs enforcing,” Welch said. Of the most recent issues involving the Truitts, Welch said that he had “sat in meeting after meeting” before becoming a council member, and during that time his observation of the former administration was that “They weren’t following the charter. They’d change it to comply with the way they were violating it.”

Any updates to the town’s charter are required to be approved by the state legislature, Presley said.

While advising residents at the meeting to go home and read the auditor’s report, Presley said he feels that it is a step in the right direction. “We’re on the right track,” he said.