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Quincy spends almost $1 million to fix accounting problem

Posted by Jessica Bartlett  December 5, 2012 03:11 PM

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Quincy officials will spend almost $1 million this year to fix a longstanding accounting problem with police and fire details, in an effort to put the city on a stronger financial footing.

For years, the city has carried with it unpaid invoices from outside contractors, who have not paid police and fire details they hired.

A total of $947,000 has not been paid to date, causing the city to carry a deficit on its books.

The issue has been continually pointed out by outside auditors as problematic, and the Department of Revenue has subsequently “held back” the city’s revenue by the deficit amount annually, not authorizing the city to spend it.

Yet city officials have planned to spend $947,000 from fiscal 2013 revenues to offset the cost, clearing the deficit from their books once and for all.

“We’re funding a problem that goes back 12 years,” said Mark Cavanagh, director of Municipal Finance

That amount includes unpaid fire and police details from this year that the city expects to be paid; however, because the Department of Revenue only looks at the “year-end” number, the city will have to pay the total amount.

Any revenue the city does collect – a number Cavanagh expects to be in the six figures – will be entered onto the city’s books as a surplus.

Councilors were pleased to see the problem finally handled within the city, but stressed the importance of coming up with solutions to force contractors to pay their details one way or another.

“What’s of more concern to me is what policies and procedures have you put in place to make sure we don’t get to this situation again,” said Councilor Brian McNamee.

Cavanagh said the city has been working to track down companies that owe the city money in different ways, using Social Security number of the employees and other identification.

The city is also working with Powers & Sullivan, an external auditor, to come up with best practices for how to charge contractors for police details in the future.

One possibility would be to ask for a down payment for the work. The city can also choose to withhold the last payment on a contract until the police and fire details have been paid off.

“It’s not as aggressive on the front end, where you’d have to take deposits and set them up -- do it at the back end before the final payment goes out and handle it that way. But one way or another, we can’t go back to the way we were,” Cavanagh said.

Cavanagh also proposed a $210,000 transfer into an account to begin to pay for Other Post-Employment Benefits, a $496,000 transfer into the city’s Stabilization Fund, and suggested putting aside large sums of money for potential weather problems and upcoming retirements.

To see the entire presentation, click. here

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