Maywood’s Chronically Late Financial Statements Source of Bewilderment, Distress For Residents And Board of Trustees

Tom Dart
Cook County Sheriff Tom Dart (Chicago Tribune).

Friday, March 13, 2014 || By Michael Romain 

Just last month, the Chicago Tribune reported that the Cook County sheriff is seeking the authority to forcibly audit the financial and police records of municipalities that “repeatedly fail to follow basic financial accountability law.” Critical to that law is the requirement that municipalities be up-to-date when filing annual financial statements.

Sheriff Tom Dart has proposed an ordinance that, according to the Tribune article, “would allow his department to become a suburb’s inspector general if it failed to follow the audit law two years in a row, and if state officials have failed to force an audit. Harvey, for example, owes audits for the past four years. Dart’s office said four other suburbs could qualify as well: Country Club Hills, Dixmoor, Maywood and Sauk Village.”

What the Tribune doesn’t note is that Maywood already has a suburban inspector general. Last July, the Board voted unanimously to “establish an office of inspector general (OIG),” which “shall serve for an initial term of two (2) years and may be reappointed thereafter for successive two (2) year terms.”

Mr. Dart’s proposed ordinance begs at least two questions. One, ‘Has the State has forced an audit on the Village?’ And two, ‘If the State hasn’t intervened, will the OIG begin its own scrutiny of the Village’s financial and policing records–if it has not done so already?’

Considering the heated discussion on the matter at last night’s Legal, License and Ordinance Committee (LLOC) meeting, the Board may very well welcome the additional scrutiny. At press time, these questions were still being explored.

At a Wednesday, March 12, Legal, License and Ordinance Committee (LLOC) meeting, Jason Coyle, a Partner with Baker Tilly Virchow Krause, LLP, the auditing firm that has prepared the Village’s annual financial statements for the last several years, presented a synopsis and overall description of the Fiscal Year 2011 annual audit. That’s the Village’s most recent audit to date, putting it outside of the audit law for two consecutive years.

“Our role as auditor is to make these financial statements” as reliable as possible for the public, potential investors, bond holders, the Board and other government officials, he said.

According to Mr. Coyle, in FY2011, 62 percent the Village’s revenue came from property taxes. That year, Maywood held $101 million in total assets and about $77 million in total liabilities. A large portion of the approximately $24 million in net assets were either restricted or tied up in fixed capital.

If a layperson is confused by the accounting jargon, that should be the least of his concern. Indeed, that portion of Mr. Coyle’s presentation was met with not a single response or question from the Board.

It was when he arrived at the section of the report entitled the “Management Letter”–which basically contains recommendations on how the Village could improve its financial operations–that the Board’s pent up frustration became apparent.

Mr. Coyle said that the auditing process could stand to improve if the Village reconciled its bank account statements with its internal account in a timely manner, provided more supporting documentation to justify financial adjustments and improved its general ledger maintenance.

To majority of the Board, the recommendations sounded all too familiar.

“This report is continuing to have the same language and issues,” said Trustee Cheryl Ealey-Cross.

“You’ve made recommendations in the past,” said Mayor Perkins “and those have not been done according to what you’ve recommended. Did you see improvements in this last audit that you did? What would you need from the Village so you can get the audit done sooner than what you’re doing it?”

“Really, what we need when we come to you to do the audit is for you to have all the information we need provided to us and all the source documentation,” Mr. Coyle said.

Mr. Coyle was tentative about casting aspersion. He qualified the report’s recommendations by saying that there has, in fact, been improvements made over the years, even if there are yet more that need to be made.

“Yes, a lot of these recommendations are similar to what we’ve had in the past, but there has been improvement,” he said. “There have been improvements over the years. I don’t want to say that there haven’t been any improvements from year to year.”

Mr. Coyle also provided some context that may shed some light on the Village’s chronic delay.

“I know that the finance department didn’t have all the personnel it needed,” he said. “Some of this might have had to do with under-staffing. I can’t speak for management. I don’t know exactly how to correct it all. Reconciling takes time. Ideally, you’d reconcile on a monthly basis, but that extra hire in finance department might help.”

For Trustee Toni Dorris, that explanation, however, wasn’t quite sufficient. In recommending that more drastic actions be taken by the Board to rectify the issue, she inadvertently injected some humor and levity into the serious discussion with her use of a certain metaphor.

“For the issue we’re dealing with, wouldn’t it be the board’s responsibility to tighten the noose around the village manager’s neck, so they are on what they need to be on top off? When these [requirements] aren’t met, then that’s a reflection on that village manager, because he or she didn’t make sure that his or her directors did what they needed to do on a regular [basis],” she said, to chuckles and mild surprise from the audience. She later corrected her word choice.

 “Moving forward, we really need to hold the village manager accountable in the worst way. We need to catch up. We need not be this way five years from now,” Trustee Dorris said. She emphasized that her comments were targeted less at Mr. Myers in particular than at the position of village manager in general.

Although he did not expound in detail on the reasons for why the Village has been consistently late in preparing its audits, Mr. Myers, who has held his current position for less than a month, said that his staff sat down with Baker Tilly and discussed ways to improve the financial disclosure process.

Maywood resident Lucille Redmond, a fixture at the Village’s board and LLOC meetings, vouchsafed for Mr. Coyle’s reticence in blaming any particular individuals for what seems to have been a recurring problem for some time.

“From what I hear, the problem that we have is internal. We’re not getting this information in a timely manner. this is not the first time. They’ve [Baker Tilly] been making suggestions for years that have fallen on deaf years. This isn’t all on the village manager,” she said.

For all of the proposed roots of the problem that were discussed, the entire room seemed united in the opinion that something needed to be done. But the Board was woefully short on particular solutions. Trustee Dorris noted, in a tone of exasperation, that this is perhaps because of the limited authority Board members have in the Village’s day-to-day operations.

“I read the ordinance and we can’t manage the day to day,” she said. “The only one who can is the village manager. The only person we can hold to the fire is the village manager. I don’t like that either. I should be able to go to Chief Talley [for instance], and say the residents on the south end are not seeing our cars patrolled. Techincally, we’re not supposed to do that. We can ask the questions, say statements. Do I want to be more accountable and have power? Absolutely. Things need to get done…But the ordinance indicates that by this being a village manager town, the only employee we can hire, fire or whatever is the villager manager.”

Trustee Ealey-Cross said that in the past, the Village had a system in place that ensured greater accountability among staff members and department heads through a direct line of communication.

“At one time we [the Board] used to have an overview from one of the department heads [at each board meeting] in terms of what was going on and happening,”  she said. “This may have been twenty something years ago. Department heads had to be present and not just sit in the audience. This should be looked at to come back so it can cut down on misinformed or misinterpreted information from citizens who don’t see a lot of what we see.”

Citizen Lucille Redmond, whose vigilance in Village matters seems almost on par with those on the Board, expressed rather clearly the one point to which both the Board and residents would agree the matter boils down.

“If you don’t know when the money is coming in and you don’t know where its going, how do you keep up?” VFP

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