More News on Rumford's Investigation

Rumford's Accounting/Audit Situation Being Investigated

Candice Casey

Rumford, Maine-With the discovery that Rumford’s Town Auditor,  Harold Blake has been performing the Town’s audits without being properly licensed for the years 2006, 2007, 2008, 2009, and 2010, the Town has lost all assurance as to the correctness of accounting practices, the validity and reliability of the books,  whether the town is in compliance with accounting standards,  whether the town is meeting the conditions of grants as well as state and federal funds received , and most importantly the security of the towns monetary assets.  

For fiscal year 2007-2008 the town spent $57,557.50 with the auditor, in fiscal year 2008-2009 $28,025, fiscal year 2009-2010 $20,000 and $12,625 had been spent as of July 1, 2010, all paid to Harold Blake.  After putting the audit out for bid for 2010-2011, the Finance Committee awarded the bid to a new Auditing Firm RH Smith.  Discussions with Finance Committee member Vincent Caruso and RH Smith were promising in producing an excellent expectation of an audit cost of $15,000 or less.  This was based on the two years of successive “unqualified audit reports,” reports stating no errors were found by Harold Blake before it was discovered the audits aren’t worth the paper they are printed on.  What the cost will be now is anyone’s guess as it must be decided how far back to conduct audits under the circumstances.  It would seem wise to go back to the last valid audit, 2005, conducted by a licensed auditor which is going to be at considerable expense, but the only way to correct errors, bring the books into order and compliance, uncover any irregularities, and criminal acts that may have taken place.

Mr. Blake and his firm of one have long been being represented by Jennifer Kreckel as disclosed by records from the Board of Accountancy which revealed to the River Valley Sun that the town auditor was and continues to be unlicensed, Mrs. Kreckel served as Rumford’s Town Attorney for three of the years in question according to Town Manager Carlo Puiia. 

Dr. Kreckel, the former Town Attorney’s husband, has been serving on the Finance Committee and is the current Chairman.  It is the Finance Committee which retains the services and oversees the auditor and finance director.

The discovery of the auditor’s license status was made by Candice Casey while investigating growing number of concerns over accounting practices disclosed at a number of Selectpersons and Finance Committee Meetings by the Town Manager and Finance Director.  After a statement made by Finance Director Debbie Lauranitis on at Tuesday, April 26th Ordinance Hearing on top of the many other issues, Candice felt compelled to contact the State for advice and clarification. 

First contacting Mike Rogers of the Department of Revenue for direction on who would be the proper person to address the concerns to, she was transferred to the State Audit Department.  Work is expected to continue with that department as the result of the discussion based on the concerns.  In the course of the discussion, it was suggested by the audit department person that she check the disciplinary record of the town’s auditor.  The state audit department staffer worked to guide her through the Maine.gov site to where we could run a check.  The check failed and the person offered to try it for her.  She had not to this point given the name of the auditor.

Immediately upon stating the name, Harold Blake, she  was told he didn’t need to run the name.  Harold Blake was well known at the state for being unlicensed and continuing to do business.  She was immediately directed to the Board of Accountancy.

The Director of Accountancy  stated that she could not say much as there is open ongoing litigation since Mr. Blake continues to perform services despite not having a license for years.  She said she could not say more and would direct her to the compliance/complaint officer who provided River Valley Sun with the documentation posted along with our previous article of April 27, 2011, “Rumford’s Town Audits Invalid for the Past 5 Years, Auditor NOT Licensed!”   This individual advised Candice that the Town of Rumford had been notified of Mr. Blake’s status.  She were also sent a complaint form to complete for his having done the audit he signed August 2010, as Harold A. Blake CPA which she immediately completed and returned adding this to the existing open complaints.  She was told this is not the only one from Rumford.

Candice then notified Town Manager Carlo Puiia and has provided him with the contact information for the state officials she has been working with.  She has also provided information to Selectman Mark Belanger.  Before learning of the unusual connections between the Finance Committee Chair and the Audit she left a message for the Kreckel to call her.  He did not return her call.  She has spoken with Selectman Volkernick.  She has left messages for Sterling, Buccina, and Adley (many for Adley) and received no return calls.  She left a message for the Vice Chair of the Finance Committee who is out of town and has spoken with two current members notifying them of the situation.  She has also left messages or spoken with previous Finance Committee members who served during the 2006-2010 audits to make them aware of the situation so they would not be surprised by news reports.

There are open investigations at the local and state law enforcement levels involving various agencies which Candice and others with information are cooperating with to the fullest. 

Uh Oh,,, Is this where Lisbon's "Good Old Boy's wonder if there might be some 'trickle down-stream' fallout? 

Such a revelation could not have come at a worse time for Rumford with the proposed TIF Districts by Selectmen and “maybe” interest from a motel developer, “maybe” something for the “Gateway” and “maybe” something for the industrial park.  Rumford did not need something else to tarnish its reputation at this time. 

With the Wind Power ordinance possibly winding down after two years,  so much to do from that, possible economic development including new TIF districts, and two new Selectmen about to be elected this is not a good time to have the Board and town leadership distracted with such a tremendous, time consuming, and high risk matter as this.  The existing Board of Selectmen, Finance Committee and Town Manager are already concerned about voters rejecting some or the entire budget on Election Day and repeating last year.  Having to deal with major accounting issues on top of all these other crisis in the town will surely have a significant  impact.

http://rivervalleysun.com/1501/rumfords_accountingaudit_situation_being_investigated/