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Town Explores $4.2 Million Deficit

Posted on 04 September 2008

By Melissa Lynch

Last week, the Southampton Town Board faced a frustrated group of town police officers, concerned over a proposal that would cut officers who had served for 20 years or longer. While the proposal was tabled, this week Southampton Town Councilwoman Anna Throne-Holst explained independent auditors have been hired to examine a $4.5 million police department deficit.

Southampton Town hired FTI Consulting to complete a forensic audit in July.

“FTI Consulting is starting to look into the root of the problem by going back several years,” Throne-Holst said. The firm will look at the department’s finance history as far back as 2002.

“Their emphasis is on the police department in order to help us address this going forward,” Town Management Services Administrator Richard Blowes said.

Blowes was once a part of the town’s audit committee, but resigned because he was concerned about financial deficits in the town.

But now, the goal of FTI will be to look at how the police department deficit occurred, and how to prevent it from happening again.

Blowes believes the department was under-budgeted and, looking at previous audits, he believes surplus funds have been used to pay off these debts, and increased retirement costs were not anticipated.

 “There was no reserve set aside for people that retire, and when the retirement payouts are not budgeted they have to borrowed from the general fund,” Blowes explained.

The town hopes to have a report in the next 30 to 60 days and by the 60-day mark hopes to have a preventative plan to discuss. 

FTI consulting, a global business advisory firm from Baltimore was paid $150,000. The move came after the unexpected announcement of a $7.2 million deficit the town is carrying from the police, highway and waste management departments, according to 2007 financial statements. According to the auditing group, Albrecht, Viggiano, Zureck & Company from Happauge, money was taken from the town’s general fund to help cover the cost of operating these departments.

 

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