Why Won't They Explain An Unfavorable Expenditure?

               UNFAVORABLE EXPENDITURE BUDGET VARIANCE

During the meeting in November of the Town Council, the Annual Audit was briefed by the Accounting Firm that conducted the annual Audit.  In the presentation, the term “Unfavorable Expenditure” was used which I did not understand.  So I submitted a Freedom of Access Act (FOAA) request on November 22, 2013:

“Respectfully request a copy of the Purchase Order for the “Unfavorable Expenditure” identified in the yearly Auditor’s report.  A copy of the “Unfavorable Expenditure” identified in the yearly Auditor’s report.”

Below is what took place:  On November 22, 2013, I received an email from the Town Clerk-

“Mr. Fillmore: The Finance Director indicated that she does not have enough information to determine what you are referencing? Therefore, she is unable to provide any further information.  You would need to be more specific with your request (FOA#152).”

Below is what I responded on the same day:

“Mrs. Lycette:  Page 4 of the Town of Lisbon, Financial Overview, prepared by Runyon Kersteen Ouellette and briefed during the Town Council meeting on November 5, 2013 the second item under Observations.  It states “The town’s Unassigned fund balance changed from 2012-2013 as a result of an unfavorable expenditure budget variance.  I am looking for all the Purchase Orders which make up this unfavorable expenditure budget variance. I hope this is specific enough.  Thanks”

On November 26, 2013, I received the following letter from Mrs. Maloy, the Finance Director.  See Below:

As you can see, Mrs. Maloy has been avoiding the question; so I asked a Councilor to look into it.  The Councilor could not get a straight answer, so I contacted the Maine State Auditor’s office last week.  The Deputy State Auditor returned my call and provided a definition for the term “Unfavorable Expenditure Budget Variance”.  According to Deputy State Auditor, Mary Gingrow-Shaw, this term is a common term in accounting.  When the town budget is approved the revenues equals the expenditures, however, at the end of the fiscal year for 2012-2013 the expenditures exceeded the revenue so the town dipped into the Undesignated Fund for the difference.  The Undesignated Fund is our tax dollars that are set aside for emergencies.  According to the Deputy State Auditor, the town exceeded their expenditures by $223,514.00.  She went on to say that the Police Department ended up spending $1,500,000.00 as of June 30, 2013.  The Police Department was approved for $1,297,852.00 so that accounts for the excessive spending.

Now, here come the tough questions; Why did we NOT hear about this during the year?  It is apparent that the people were never supposed to learn this because the Finance Director has worked very hard to keep this from getting out.  How much more money has been spent that the Town Council and the people are unaware of?  I attend almost every Town Council meeting and this excessive spending or using the Undesignated Fund was never brought up during the meetings I attended. 

What else don’t we know?

Larry Fillmore