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Accountant says Lockport financial reporting woes date back years

LOCKPORT – The city’s problems with completing accurate financial statements are nothing new, an Amherst accountant told the Common Council on Wednesday.

Randall R. Shepard of The Bonadio Group said that the roots of the city’s current fiscal stress date back at least to 2005 and intensified starting in 2007. Almost every year since then, Shepard said, the city’s independent auditor has caught errors that had to be repaired by making as many as two dozen “significant journal entries” – late-breaking corrections in the city’s year-end financial statements.

In December, the State Comptroller’s Office slammed City Treasurer Michael E. White and his staff for producing inaccurate 2012 financial reports that told the Council that the city had a small fund balance when it actually was $1.15 million in the hole.

Shepard also said that former Mayor Michael W. Tucker barred the Treasurer’s Office from auditing the Youth and Recreation Department. Reached by phone after the meeting, White said Shepard’s statement was true.

Tucker said it was false. “I never even talked to Mike about that,” the ex-mayor said.

Shepard told the Council, “It was stated to me many times that the mayor was very totalitarian in his approach.”

Youth and Recreation Director Melissa I. Junke is being investigated over the use of Tucker’s city credit card to pay expenses for a golf tournament organized by her brother’s restaurant to raise money for her department. Corporation Counsel John J. Ottaviano said Hamburg attorney Brian D. Doyle is to appear before the Council next week to make his report.

Shepard said he talked to 14 people to compile his report on the city’s financial process, but Tucker said he was not among them. Mayor Anne E. McCaffrey said Tucker was at the first preliminary meeting, which occurred before Tucker resigned Feb. 21.

White said he and his entire staff talked to Shepard, whose firm was hired in February for $7,000 to make its report.

White has maintained that the city’s financial staff is too small to handle the workload.

The city auditor suffered a long-term illness in 2007 and wasn’t replaced for years, and the Council also eliminated a principal account clerk job. Shepard said the city has no personnel evaluation process and thus lacks accountability. He called for the creation of an audit committee, which should include people who don’t work for the city.

Shepard said the city needs to hire a part-time accounting worker at once and consider a long-term restructuring of the Treasurer’s Office. It should split the jobs of chief accountant and auditor, since those duties aren’t really compatible, and cross-train workers so people can fill in when there are absences.

“There’s only one person in this organization who can do payroll,” Shepard said. “She has to schedule her vacations around the payroll weeks.”

“I think the Council is committed to implementing these recommendations,” McCaffrey said.

White unsuccessfully sought more staff during last fall’s budget process. “We would have done much better if we’d had our wishes honored in the fall,” he said.

Tucker said, “The Treasurer’s Office was fully staffed. There’s no fewer people there than there were when Jim Ashcraft (White’s predecessor) was treasurer.”

Shepard said the city’s 2013 books still aren’t complete.