In False Allegations About Charlestown’s Savings, It Is The Truth That Is Missing
If you move your car from the driveway to the garage, the car is not missing, stolen or lost. It has simply been moved. In the garage your car is still available to drive to work and it has the same value. Your total assets are unchanged. Reporting the car stolen would be a false police report, and making accusations against particular neighbors would be even more damaging and irresponsible, especially when you know right where the car is.
Charlestown’s fund balance is essentially the town’s savings parked in different locations. These are not tax funds raised in one year, but a slow accumulation over many years. Most are located in an unassigned category (called the unassigned fund balance) that can only be used for an emergency or as part of the budget process. The rest are in an assigned category (called the committed fund balance) and are dedicated to particular uses. For instance, the voters approved $500,000 to be kept on hand to cover legal services. We haven’t used funds in this account in a while, but if Dollar General had appealed their denial and the town did not have this fund, the town might not have been able to defend itself.
Regardless of where savings are located, total savings are the same. The most recent town audit separates some of the savings, while a previous audit reported them in the unassigned portion. The town’s auditor stated on February 14 that the 2021 audit is correct and that nothing is missing! Simply put, $3 million is not missing; it is parked in the garage.
Despite knowing that there is nothing missing, Town Councilor Deborah Carney and her political group sent an email newsletter on February 11th to hundreds of subscribers saying that $3 million is missing from the town’s accounts and asking for a forensic audit. The town is audited every year, but a forensic audit is done when fraud is suspected. These false accusations against town staff and her fellow councilors have now been posted on Carney’s and other websites and unleashed across social media platforms where the false accusations have grown from “missing” to “stolen,” leaving the targets with smeared reputations and without redress.
Charlestown’s tax rate of $8.18 per $1,000 of valuation is the third lowest tax rate in the state. By comparison, Hopkinton’s tax rate is $18.53, Richmond’s is $20.62, and South Kingstown’s is $14.45. Charlestown has very little debt, a high level of savings, and a higher quality of life than most anywhere on the East Coast. When there is nothing to find fault with, a false scandal has to be manufactured. Using lies and smears to destroy local politicians is not an acceptable way to attempt to win an election, but in an age where fewer people read newspapers and with expanding access to social media, this is an effective way to mislead some people.
February 22, 2022 @ 5:58 pm
The statement that the funds were lost is inaccurate. However, we can’t lose sight of the fact that a $3MM accounting error was made. We would all benefit from an independent review if the controls in place in the Treasurer’s office to understand what happened here and how to prevent a reoccurrence. More importantly, what other control weaknesses may exist that can be uncovered and corrected before they result in another issue?
February 23, 2022 @ 8:54 am
Claiming money is missing when it is not, and asking for a forensic audit which would cost hundreds of thousands of dollars and implying that crimes have been committed is pure slander and that is what this post is about. But to answer your question, accounting for the funds in the unassigned fund balance is not an error. In fact, the state of Rhode Island requires that only total fund balance be reported. Another method is recommended by the auditor. It was confusion/miscommunication about this notation, which was at issue. The Budget Commission Chair noted at the February 14 meeting that the new Fund Balance policy enacted on February 14 has procedures that will help to prevent miscommunication/confusion in the future. Expending a large sum of money, such as conducting a new audit, to discover information we already know seems like a huge waste of time and resources.
February 22, 2022 @ 9:21 am
This 3 million “excess” has seemed to be an issue for a while now. Wasn’t this overpayment of tax dollars supposed to have been dealt with last year or the year before? why not return most of it back to the taxpayers where it belongs. That way the back and forth dirty politics, at least with this issue, could be put to bed.
February 22, 2022 @ 10:08 am
Half of the budget is for Chariho. We pay about $17 thousand per student based on an estimate of the next year’s student numbers. I believe in 2019 there was an unexpected drop in the number of students which resulted in less money going to Chariho and more staying in the budget. Also some road reconstructions came in under budget. As a result there was a two year reduction in the tax rate as well as paying down the police pension debt.
February 21, 2022 @ 3:27 pm
Where is the LIKE button!
Thank you for the information.
February 21, 2022 @ 12:57 pm
I have been paying attention and I have not heard or read anything about the funds being missing or stolen. What I am aware of, after watching the town councils last agenda meeting on live stream, was that several council men and women would not allow Ms. Carney to put “discussion about the 3 million” on the agenda. In my opinion, the proper thing to do would have been to allow
this to be discussed at the town council meeting openly so that none of us would have to be exposed to a “he said, she said” scenario. I would like to think we all deserve better than this.
February 21, 2022 @ 4:14 pm
The $3 million you refer to was discussed—openly and in great detail—at the Town Council meeting on February 14. I encourage you to listen to the video of the Town Council meeting. You will find the discussion of the $3 million and other important items related to the town’s finances under “FISCAL MATTERS: A. Discussion and Potential Action Regarding the Presentation of the 2021 Fiscal Year Audit by Cayer Caccia LLP.” At the meeting, the auditor presented the facts contained in the 2021 audit; the Town Administrator summarized his findings in a statement that he read into the record; the Budget Commission summarized what it had discovered as well; and attendees asked questions. When you listen, you will hear the auditor testify, specifically, that $3 million is not missing. It should go without saying that money that is not missing could not possibly have been stolen. However, you will hear the auditor testify that there was no fraud, which stealing $3 million certainly would be.
What Ms. Carney requested be on the the agenda and the other councilors declined to place on the agenda was a discussion of a “forensic audit”. Forensic audits are conducted primarily to discover evidence for a criminal trial. Having a forensic audit or even an audit of the audit before the first audit had even been presented to the Town Council would have been premature.
The accusation of missing money was made in a newsletter sent from Ms. Carney’s political group.
February 21, 2022 @ 6:29 pm
During the live stream of the agenda meeting, it was agreed upon to remove the word forensic. Cody was fine with it being on the agenda but he wanted the word “forensic” removed. That was immediately agreed upon. I never once got the impression that anyone was hiding or stealing money. It might be that those who are mentioning the word “missing” just might not understand what happened. Again, in my opinion, by not allowing it to be in the agenda for councilors to be able to ask questions, it could very easily appear that something is being hidden, even though it may not be. And again, IMO, we should be better than this. I understand that this is not the first time there was confusion with the towns budget. Maybe it is time to lesson the confusion and compose a letter that explains all that rather than pointing fingers.
February 22, 2022 @ 5:53 pm
The only thing not on the agenda was a forensic audit. The regular audit and all the town’s finances were on the agenda and discussed in full on February 14.
It is important to realize that there is a difference between a budget and an audit (called the town’s financial report) that is prepared by the town’s outside auditor. All five councilors agreed to place discussion and potential action regarding the presentation of the Financial Report (the audit) on the agenda.
A memorandum (similar to a letter) was sent by the Town Administrator to the Town Council in advance of the Town Council meeting about some confusion regarding the financial reporting. There has never been confusion about the total fund balance of the town. Again, at the February 14 meeting, the auditors presented their work and answered all questions from Councilors and from those in the audience. The administrator’s memorandum was read at the meeting and is a part of the record of the meeting. If you are interested in the issue of the $3 million, which Ms. Carney’s political pac wrote is missing, and want to understand that it was discussed and that it is not missing, you will want to watch the meeting of February 14. Otherwise, there is no issue regarding the budget.
Again the agenda meeting was February 9 and on February 11 Ms. Carney’s group sent out an email blast saying $3million was missing and asking for a forensic audit. A forensic audit of even a small part of the town’s finances would cost over $100 thousand and is used to gather evidence for a criminal trial. The request is being made simply to smear reputations.
February 21, 2022 @ 12:25 pm
The most expeditious way to settle the issue of “missing funds” is to identify the institutional custodian and investment manager for the funds, provide a list of the underlying investments and investment performance reports for the finds.
Failure to provide these items means the “missing funds” are “smoke and mirrors” governmental accounting and not monetizable assets.
February 21, 2022 @ 10:02 am
“Using lies and smears to destroy local politicians is not an acceptable way to attempt to win an election,” this is nothing new either on a local level or a national level!!! Hey…….it worked on Trump (I’m registered “unaffiliated” so don’t go there), why not work here locally??? Anyone with a have an ounce of common sense/intelligence, or a half of a brain can figure out what is going on here, “DIRTY POLITICS”, and we know where it is coming from. The folks who have been running this town have done a good job and that is the reason they have been elected; AND….will get reelected come voting time. I understand the purpose for this email; however, I would not fret this issue too much. Just keep doing what you have been doing, the ugly stuff will go away and life will continue as it has been. As been stated, “Great difficulties may be surmounted by patience and perseverance,” (Abigail Adams, wife of John Adams). I have another quote for the “naysayers”, however it probably is not printable for this setting!!
February 22, 2022 @ 10:10 am
It worked “ ON trump”? Or “FOR trump”? I do hope you meant FOR. In 2016 at least….and almost again in 2020.
Unfortunately the divisive trend of lies and spin and propaganda has only increased to the point of now we have fox news actually siding with putin against democracy itself. Sorry, it has to be said.
Obviously lies, spin and corruption are not just coming from one party unfortunately, and it does need to stop. The key is to hold persons accountable to the same set of standards, and not give blind loyalty to any one person.
Thank you again to the steering committee and Ruth for the clarifications on that troubling issue.
February 21, 2022 @ 10:00 am
People who manufacture lies and spin the truth for their own political advantage should be voted out of office. Permanently. Simple. Haven’t we all had enough of this? See you at the polls.
February 21, 2022 @ 9:41 am
This kind of unjust falsehood is rampant in our democracy. Charlestown is a quiet, beautiful and charming coastal town, and one of the best on the coast. What can I do to stop the spread of false information.
We are lucky to have had good people watching after the car in the garage.
February 26, 2022 @ 1:35 pm
Mr. Dussault, anything you do for the benefit of the residents of this beautiful town would be appreciated. Keeping the desires of the residents foremost in our discussions will tell you what the right moves are.
February 21, 2022 @ 9:27 am
Thanks for the clarification. It is so pathetic that people use such tactics and it is so sad that they can be effective.