The Newmarket Town Council met on September 12, 2007 with legal counsel for an overview of the forensic audit.

 

Town of Newmarket

Town Council

Statement regarding the Forensic Audit

Released Thursday, September 13, 2007

Pursuant to RSA 91-a:2(c), at a special meeting on September 12, 2007, the Town Council met in a consultation with legal counsel Peter Taylor of McNeill Taylor and Gallo. Both Town Administrators Ed Wojnowski and Alphonse Dixon, Finance Director Don Parnell, and Jeff Graham of Graham and Graham were present during this consultation. Earlier this summer, the Town Council voted, in response to a Citizen's Petition, to conduct a forensic audit to determine whether the Town's financial policies and record keeping systems were sufficiently detailed and documented. This consultation was conducted with Mr. Graham and legal counsel to review the status of the ongoing forensic audit, and to discuss any potential legal issues related to the audit's findings.

Mr. Graham informed the Town Council that his firm has completed its analysis of the vendor files from letter A through M, and that the audit has identified more than 2,100 transactions within this range of files that need further evaluation due to insufficient supporting documentation and other factors.

Following the consultation with legal counsel, the Town Council voted in public session to authorize the expenditure of up to an additional $35,000 in funding to support the completion of the forensic audit by the firm of Graham and Graham. The total amount of funding authorized to date is $74,000. (The initial authorization was for up to $36,000. The Town Council authorized an additional $3,000 at its September 5 meeting). If at the end of the year, the Town budget is over expended due to this additional cost, the Town Council will seek authorization from the New Hampshire Department of Revenue Administration to cover this unanticipated expenditure from the Town’s fund balance, which exists for this purpose.

The Town Council authorized the additional expenditure to allow the completion of the audit as originally proposed. Due to the significant number of transactions needing review, and the necessity to complete the review of the remaining vendor files, the forensic audit will not be completed by September 15. While no date has been set for its completion, Graham and Graham is working expeditiously to complete the audit as soon as possible.

In addition, at its special meeting on August 22, 2007, the Town Council voted to rescind the Town’s contract with the Mercier Group for the FY2006-2007 audit and to authorize the release of a request for proposals for the audit of the Town’s finances for a three-year period, beginning with FY2006-2007. Proposals are due Friday, September 14. The Town Council made this decision based on the advice of legal counsel and concerns expressed by Graham and Graham regarding the thoroughness of the FY2005-2006 audit. The Town Council expects the final forensic audit report to detail these concerns.

The Town Council would like to assure the public that the Town of Newmarket, its staff and the Town Council are fully committed to act on the findings and recommendations of the forensic audit.

At this time, additional comments on the forensic audit would be premature. Further updates will be provided as possible.