Charlestown taxpayers can rest assured that $3 million of their hard-earned cash is not missing and that their tax dollars have been spent as they authorized. Additionally, they can rest assured that the city is well positioned to deal with an emergency.
There is confusion, so let’s try an analogy. Say, for example, you have $1,000 in your checking account and you plan to spend $300 on gifts for your kids, family, and friends for next year’s holidays. You transfer $300 into a savings account. Of course, the result is that your checking account now shows a balance of $700. You still have $1,000. The $300 is not missing, lost, stolen or hidden; it’s exactly where you put it.
The 2021 financial report (the audit) looks back over time to the last financial year (which covers parts of two calendar years, 2020 and 2021). That is, it is a report of the actual financial transactions that took place between July 1, 2020 and June 30, 2021, and the city’s savings at the end of that fiscal year, the June 30, 2021.
Should certain expenditures that did not actually occur in the 2021 fiscal year be included in the 2021 financial report, even if the funds were authorized by voters to be spent in the 2022 fiscal year (l exercise in progress)? The auditor recommends that these types of funds be reported in an “obligated” fund balance account in the year prior to their expenditure.
The confusion arises because in the 2020 financial report (the report that covers July 1, 2019 to June 30, 2020), certain funds authorized to be spent in fiscal year 2021 were not reported in a balance account of separate fund in the 2020 financial report. report. It is important to know that the financial reports were not wrong and that there was no “accounting error”. It was a difference in the reports. The method used in the 2021 financial report is to be preferred.
When one spends time looking at the city’s financial reports and the budgets passed by voters, how much money has been and is available in the city’s total fund balance and how much has been and is available to specific purposes at certain points in time is no mystery.
To put it another way, no matter what account you have your $300 in, how much money you have doesn’t change and what the funds should be used for and when they should be spent don’t change either .
For people who should know to say they don’t know how much money the city has, where it is, and how it should be spent, it’s misleading at best. Telling a story about an accounting error that doesn’t exist and implying that there’s a fraud that also doesn’t exist in an attempt to confuse some people for political advantage is doing the city a great disservice.
The writer is a member of the Charlestown City Council.