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WVN #430: More surplus funds disclosed/New tax rate set

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  • waylandvoters1
    Dear Wayland Voter, The excessive surplus cash total that led to a Special Town Meeting vote last month for $4 million in tax relief turns out to be even
    Message 1 of 1 , Dec 14, 2011
      Dear Wayland Voter,

      The excessive surplus cash total that led to a Special Town Meeting vote last month for $4 million in tax relief turns out to be even larger than previously stated.

      Also in this newsletter: That tax relief gives Wayland a new state-approved property tax rate of $19.01, moving the town down the list of the highest rates in Massachusetts.


      The latest in-depth report on fiscal procedures by Abrahams Group consultants revealed an additional $691,998 in surplus funds at the end of Fiscal 2011 on June 30.

      This leaves the town with about $7 million in free cash after subtracting the $4 million for tax relief. The total is toward the high end of the Finance Committee's unusually generous guideline of 5-10% of the operating budget in free cash.

      The Abrahams restatement of school expenditures and revolving funds for Fiscal 2011, received on Dec. 12, hasn't yet been discussed by Wayland's Operational Review Committee or other town officials. A restatement is a correction of a previously issued financial statement, usually because of accounting irregularity or misrepresentation.

      Like previous Abrahams studies resulting from a 2010 Town Meeting vote, the new 121-page report outlines a pattern of surpluses achieved without taxpayers' knowledge as well as accounting procedures that raise questions about consistency, accuracy and even legality. Residents paying for special school services were, in more than a few cases, overcharged. On the other hand, taxpayers have been subsidizing services because the school department didn't fully expend fees collected for such services.

      School General Fund expenditures required a restatement of $865,000 in salary and wage costs that were not assigned to the correct account, department and school, bringing the school ledger into agreement with the staff assignments as recorded in the human resources office and other documents. For example, part of the Loker principal`s salary was charged to Before-After-School-Extension (BASE) parents in apparent violation of the law.

      The report restates 14 School Department Special Revenue (revolving) Funds which had over $3 million in balances at June 30. Revolving funds include fee-based programs, including The Children's Way (preschool), Pegasus (summer programs), Full Day Kindergarten, BASE (programs before and after school), transportation, athletics, and instrumental music.

      The analysis states that fees should be applied entirely to the intended services and taxpayers shouldn't subsidize such services. Part of the new-found free cash surplus results from restating some fee receipts to other accounts accordingly.

      Abrahams reported irregularities in revolving fund accounting including payouts without invoices or documentation.

      -- Expenditures through a substance abuse grant lacked complete documentation and appeared inconsistent with other school department reimbursement practices.

      -- Without substantiation, $3,500 was charged under the authority of the business office to the athletic fund because originally payments were made from the principal's discretionary/lost books account. This reimbursement was booked without any documentation.

      -- BASE invoices were charged to the Full Day Kindergarten Revolving Fund. It also appears that fees paid by parents for BASE and Full Day Kindergarten were "donated" to METCO, the program that brings students from the Boston area to Wayland schools. BASE and Full Day Kindergarten program fee payers had no knowledge of this transaction and there appears to be no legal basis for such a transfer.

      With Abrahams' adjustments BASE has a fund balance of over $514,000; Pegasus is over $341,000. These surpluses now appear to be overcharges to fee payers and parents will be due refunds. Excesses accumulated over a number of years.

      At the Dec. 5 School Committee meeting Superintendent Stein reported that he had calculated actual costs of the Full Day Kindergarten program to be $4,000 per child, in line with costs in other towns. Parents were originally charged $4,950 per child. He requested and received permission from the School Committee to refund overpayments to parents. BASE users will be charged the same $4,000 and given similar refunds, even though that program is a bit more expensive.

      These accounts are examples of funds with notable growth that occurred mainly in Fiscal 2010 and 2011.

      During that time the school business manager retired sooner than expected and Superintendent Gary Burton was heading toward retirement. Burton's replacement, Paul Stein, took over last summer as the Abrahams Group restatement was under way, inheriting a new business manager chosen by Burton.

      Earlier Abrahams recommendations included shutting down illegal checking accounts. The new report indicates that not all of those checking accounts were closed.

      Some findings in the new report simply point to substandard accounting. For example, Abrahams Group recommended that the town immediately stop allowing one employee to charge meal and room conference expenses for many people on one credit card. Employees should submit separate expense accounts.

      The petitioners' article that led to tax relief via Special Town Meeting in November was based in part on earlier Abrahams findings and recommendations. Some taxpayers alleged a pattern of hoarding surpluses to avoid having to ask voters for tax overrides.

      The latest Abrahams report is at:


      -- WVN Staff


      Wayland's tax rate for Fiscal 2012 is officially $19.01 per thousand of assessed value. The state certified the tax recapitulation sheet on Dec. 13.

      Some towns' rates are not yet certified. But a quick survey indicates Wayland's 2012 rate of $19.01 has dropped to at least seventh place, tied with Greenfield.

      Of the towns that have filed, those with rates higher than Wayland include Bolton, Westborough, Longmeadow, Amherst, Shutesbury and Pelham.

      The highest rate seen so far is $19.78 in Bolton. It is likely that Wayland's projected rate of $20.71 would have been the top rate in the state had Town Meeting not approved transferring $4 million in free cash to the budget.

      Figures were not yet available for Springfield and Sharon, whose tax rates ranked 1 and 2 last year.

      Sudbury's rate rose from $17.03 to $17.60. Sherborn's rate also rose, from $17.72 to $18.22.

      Wayland's Special Town Meeting, called by petitioners, enabled taxpayers to reduce taxes this year. The Abrahams Group, whose latest report is noted above, had suggested using some free cash to reduce taxes.

      -- WVN Staff

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      Wayland Voters Network
      Michael Short, Editor
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