First Selectman's Statement: Temporary Budget Freeze and Finance Department Announcement

When I assumed office six weeks ago, I began meeting with department heads to review the status of their budgets and spending. I quickly became aware of some concerning trends, related to spending in the first two quarters of the fiscal year versus the adopted budget. As I began to assess that situation, I also became aware of issues with our overall accounting for spending in the current and prior fiscal year. My promise to the public on my first day in office was that as I learned more about the issues affecting our finances, I would share that with you.

Last night, the Board of Finance and Board of Selectmen held a joint meeting at my request to discuss the status of the Town budget. At the joint meeting, department heads highlighted serious discrepancies between their internal tracking of spending and the MUNIS reports made available to Board members each month. Many expenses appear to be double-booked or need to be reclassified to the correct accounts. There are also broader concerns about the trajectory of the budget overall due to unusually high legal costs due to several lawsuits the Town has been involved with during this fiscal year, major repairs performed to Town facilities such as the Youth Center, and unbudgeted costs in the Finance Department for temporary help and advisory services needed to complete the FY21-22 audit which was submitted late.

As residents are aware, the Town has experienced significant staffing turnover in recent fiscal years. Savings due to prolonged vacancies in departments such as Public Works may help even-out the overall budget. However, without accurate financial reporting, it is difficult to say at this point where the Town’s spending year-to-date truly lies and even harder to project where things will land when the fiscal year ends.

Ensuring the financial stability and sustainability of the Town government you have entrusted me to manage as First Selectman is my top priority – one I believe I share with every member of the Board of Selectmen and Board of Finance. To ensure the Town is able to deliver accurate reporting and management of our Town finances, I will be reorganizing the management of the Town Finance Department. This will include changes to our internal procedures. I will be assisted by Colchester’s former chief financial officer Maggie Cosgrove who is currently serving as the Town’s finance advisor.

Last night, the Board of Selectmen also voted to create the position of Deputy Director of Town Finance. I am happy to announce that Michelle Marceau, accountant for Colchester Public Schools and a former employee of the Colchester Town/Board of Education joint finance office will be taking over this role effective Monday, January 8. This means that Michelle will also be serving as the Acting Director of Town Finance until further notice.

Together, I am looking forward to working with our Finance team, all department heads, the Board of Selectmen, and the Board of Finance to correct the issues we have identified so far, to ensure the timely submission of future audits, and to responsibly manage Town spending.

In the meantime, as a result of the many unknowns in our financial reporting, I am implementing a soft spending freeze, effective immediately. All purchases will need to be approved by the First Selectman until further notice.

Sincerely,
Bernie Dennler
First Selectman