Different 2004-2005 Audit results reported...

The August 2 article by the West Haven Voice entitled "More Red Ink!" reports slightly different audit results from 2004-2005 fiscal year, but the news is still not good. According to the article, the audit firm of Levitsky & Berney of Woodbridge produced a draft audit that showed a $4.2 shortfall. (Given that this is from the draft audit, it's possible that the Voice had to go to print prior to the final findings, and that the New Haven Register article that we wrote about in the blog post entitled "Auditors revise 2004-2005 Results").

This article gives more detail on the grant money mis-categorizations:

A pattern of using grant money in the operation side of the budget has been seen and verified by the auditing firm, according to the draft report. It gives one specific example of what is thought to be a pattern by administration officials.

“Under reclassification of an error,” the company found city officials had “misdassified” some grant revenues and projects were bonded for more than their total cost.

“Subsequent to the issuance of the audit report, management discovered that some grant money received for School Construction Projects were misclassified as revenue to the general fund in current and prior periods, also some projects were bonded in excess of the net project expenditures,” the report states.

The Voice also states that according to unnamed sources, "grant money came into the city, put into the general fund, and bonds used to pay the city’s portion of projects were quoted in excess of what was necessary. The excess money was never put back into the grants that were shuffled to the general fund."

State Bonding laws changed in 1998, both in terms of how they can be categorized, as well as policies for how refinanced bonds should be handled. Concern is apparently being voiced (as given by that unnamed source) that the State will be asking for the reimbursement of funds that were in excess of what were needed, and that the Mayor will be looking to negotiate with the State. From the Voice article:

What is feared is the forensic audit now being conducted by Checkers, Inc. and some three months behind schedule might show more extensive use of grant and bond money for expenses.

“The mayor is more convinced than ever that people had to know what they were doing in the last administration, and is ready to have outside agencies look into possible criminal charges,” sources said.

Hmm.