USA > Massachusetts > Hampden County > Palmer > Town Annual Report of the Officers of the Town of Palmer, Massachusetts 1922 > Part 2
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APPOINTMENTS. Thomas W. Kenefick was ap- pointed Town Counsel; Harriette Paine, Bookkeeper; Louis E. Chandler, Burial Agent; David L. Bodfish, Su- perintendent of Graves ; James Summers, Chief Engineer ; Louis Leveillee, Sealer of Weights and Measures; Fred H. Smith and Michael H. Davitt, Inspectors of Animals; and Timothy J. Crimmins, Chief of Police.
During the year Thomas W. Holt and Edward F. Mc- Kelligett resigned as police officers and Daniel V. Fogarty and Frank M. Doyle were appointed to fill the respective places.
Early in the year Willard C. Hitchcock, one of the as- sessors, resigned his office and the Board in joint conven- tion with the remaining assessors appointed Daniel V. Fogarty to serve as assessor until the next annual meet- ing or until another is qualified.
By the resignation of Edwin J. Duncan a vacancy was created in the Board of License Commissioners and Oscar Bressette was appointed to serve as license com- missioner until the next annual meeting or until another is qualified.
The Selectmen, under authority of the vote of the annual meeting, made a contract with the Central Massa- chusetts Electric Company for lighting the streets. The appropriation therefore was $9373.65, with $300.00 added for extra lights. The charge per light was the same as last year, namely, $21.85. The Board placed additional
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lights where they appeared to be needed and the total ex- penditure for lights during the year was $9588.20.
Four licenses to collect junk were granted during the year, each for a fee of $35.00, making $140.00 in all.
Early in the year the Board filed a taking of the Con- verse lot for the new high school and attempted to nego- tiate with Henry D. Converse an adjustment of the com- pensation to be paid. In this effort the Board was un- successful, however, and a petition for a determination of the damages to be paid for the taking was brought by Mr. Converse and is now pending in the Superior Court, not having been yet reached for trial.
There are no suits for highway damages pending against the town at the present time, except a suit of Bernard A. Kaplan of Boston which was started on the 5th of December and is returnable at the Superior Court in Boston on the first Monday of February. The claim is for personal injuries alleged to have been sustained in Au- gust last at a point in the road from Thorndike to Forest Lake between the trolley switch and Whipple's Bridge. Mr. Kaplan's attorney visited Palmer in the fall and the Board went with him to look over the ground. From what the Board saw and from what they have been able to learn from witnesses who were familiar with the condition of the road at about the time of the accident they have not been impressed that the case was one for settlement but rather for trial.
Litigation with James H. Murphy, the contractor who built the Wenimesset school at Three Rivers, is still pending. Numerous hearings have been had and probab- ly many more will be had before it can be finally deter- mined whether the town is indebted to Mr. Murphy, and if so, for what amount.
After the state auditors had completed their exam- ination of the accounts of the town negotiations were un- dertaken with the surety company that was responsible upon the bond of the defaulting town treasurer and an ad- justment was finally secured whereby the company paid
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the town $25,866.86, covering principal indebtedness of $25,052.65 and interest added to the amount of $814.21.
Negotiations are in progress with the surety com- pany involved for an adjustment of its obligation to the town as surety upon the several bonds of Mr. Hawkes as tax collector. In this matter the Board anticipates an early settlement of the town's claims without the expense and delay of litigation.
During the year the Board found a customer in the construction company that was building the cement road from Shearer's Corner to the Wilbraham town line for the old fire engine and made a sale thereof for the sum of $225.00.
In March the Board advertised the town lot on East Main Street in Three Rivers for sale at public auction and it was struck off to Emma J. Giroux for the sum of $1275.00
The Board would suggest that the votes consider the erection of a storage shed at the town farm, or on land to be secured by lease or purchase at some other conven- ient place, for the proper housing of vehicles, machinery and other property of the town at times when not in use. Such building need not be an expensive affair and the re- sult to the town would undoubtedly be a saving over amounts now paid for rent and besides the property would be given proper protection from the weather.
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RECOMMENDATIONS.
Statement of Recommendations for the year 1922:
Election & Registration
$1,200.00
Premium Workmen's Compensation Insurance 600.00
Auditing & Accounting
1,260.00
Selectmen's Other Expenses
500.00
Selectmen's "Contg."
1,100.00
Special Police
1,000.00
Printing & Distributing Town Reports
1,200.00
Salaries of Selectmen
750.00
Law & Claim Department
1,500.00
WILLIAM B. KERIGAN, Chairman, FRANK G. ROGERS, CHARLES A. CALLAHAN, Board of Selectmen.
State Auditor's Report
DEPARTMENT OF CORPORATIONS AND TAXATIONS Henry F. Long, Commissioner State House, Boston
April 24, 1922
To the Board of Selectmen, Mr. William B. Kerigan, Chairman, Palmer, Massachusetts.
Gentlemen:
I submit herewith my report of an audit of the ac- counts of the town of Palmer, made in accordance with the provisions of Section 35, Chapter 44 of the General Laws. This report is in the form of a report made to me by Mr. Edward H. Fenton, Chief Examiner of this Divi- sion, who was placed in charge of the work.
Very truly yours, Theodore N. Waddell, Director of Accounts.
Mr. Theodore N. Waddell, Director of Accounts State House, Boston Sir:
As directed by you I have made an audit of the books and accounts of the town of Palmer and submit the fol- lowing report thereon:
Early in January of the current year the treas- urer appeared before the selectmen and stated that he had been using funds of the town and that he was short in his accounts between $18,000 and $20,000. An examin- ation of the treasurer's accounts for the period from Jan- uary 1, 1919 to January 18, 1922, however, disclosed a cash discrepancy of $25,052.65.
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It has been the custom for the treasurer to deposit in the bank all town funds received and to make all auth- orized payments by check, with the exception of pay- ments on account of forest fires, which were made in cash. A reconciliation of the amount called for by the cash book, as of January 1, 1919, with the amount on de- posit at the Palmer National Bank as of that date shows that the funds of the town were intact at that time. It would therefore appear that the diversion of cash from the treasury began during the year 1919, and had a prop- er examination and reconciliation of the cash book balance with the bank statements been made at any time after July, 1919, the fact that town funds were being diverted from their proper channels should have been disclosed.
I have made an examination of all cash transactions as shown by the cash book, check books, and bank state- ments for the period covered by the audit, and have pre- pared statements, which are appended to this report, showing a reconciliation of the treasurer's cash with the bank accounts as of December 31, 1918, 1919, 1920, and January 18, 1922.
On January 1, 1919, the balance as shown by the cash book was on deposit at the Palmer National Bank, with the exception of $147.83, which the treasurer states was, without doubt, represented by cash in the office, al- though there are no records to verify this statement. I have, however, accepted his statement as correct and have prepared tables on the assumption that the accounts were correct on January 1, 1919.
On December 31, 1918, check No. 29901 was drawn in favor of W. & L. E. Gurley, for $15; but this check was not cashed, although charged on the books. On Febru- ary 1, 1919, check No. 30102 was drawn in favor of W. & L. E. Gurley, for $11.57, the treasurer stating that check No. 30102 was issued in place of No. 29901, as $11.57 was the correct amount due. As this adjustment of $3.43 did not appear on the books as a refund, I have charged the amount against the treasurer.
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On February 14, 1919, checks Nos. 30211 for $25.27 and 30248 for $17.47 were drawn in favor of the Central Massachusetts Electric Company. The treasurer states that check No. 30248 was issued in place of No. 30211, as $17.47 was the correct amount due; but as this adjust- ment of $7.80 did not appear on the books as a refund, I have charged the amount against the treasurer.
I have also charged the treasurer with $25 for check No. 33908 which was returned by C. H. Banister, as the amount had previously been paid; and five cents on check No. 31277 which was drawn for five cents less than the amount called for by warrant No. 90. With these ad- justments, the cash discrepancy for the year, as shown by a reconciliation of the cash book balance with the bank balance as shown by the bank statement, is $571.06.
As previously stated, it was the custom for the treas- urer to deposit all receipts and to make payments by checks only, except payments on account of forest fires. I have, therefore, prepared tables showing the actual cash transactions of the treasurer's office by years, which also serve the purpose of a proof of the cash discrepancy as shown by the reconciliation of the cash book balance with the bank statement.
During the year 1919, the treasurer withdrew f om the bank on checks drawn to the order of Geo. E. Clough, Treasurer, $18,700. This amount was withdrawn in instal- ments of from $100 to $600 for the purpose, as stated by the treasurer, of obtaining money to cash town checks, al- though during the year 1919 the town checks cashed by the treasurer, as shown by the checks on file, was $12,570.99.
There were also six checks drawn to the order of var- ious persons for amounts aggregating $10,686.48, which the treasurer states was for personal investments. An investigation of the original deposit slips on file at the Palmer National Bank disclosed the fact that five checks were deposited from December 29, 1919 to January 3, 1920, aggregating $15,097, which could not be identified
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with any transactions belonging to the town. The treas- urer stated that these checks were received by him in connection with his stock speculations and had been de- posited to the credit of the town account as a partial res- titution of town funds used for personal investments.
The cash discrepancy for the year 1920, as shown by the appended tables, was $15,751.17. Checks Nos. 35856, 36325 and 36481 were drawn for 50 cents, 25 cents, and 60 cents, respectively, less than the amounts called for by the warrants, and I have therefore charged the treas- urer with these amounts.
Check No. 35444 for $8.55 was returned by the Standard Oil Company as the amount had previously been paid, and since the refund did not appear on the books, I have charged the treasurer with this amount.
During the year 1920 the treasurer withdrew from the bank on checks drawn to the order of Geo. E. Clough, Treasurer, $16,362 in instalments of from $200 to $800. In attempting to reconcile the aggregate payments made by the bank, as shown by the bank statements, with the aggregate of the cancelled checks on file. This necessitat- ed the checking of each check with tke payments made by the bank as shown by the bank statements, and it was found that from August 6 to October 11, 1910, eight pay- ments of $500 each and one payment of $800 had been made by the bank for which there were no cancelled checks on file; and by checking the cancelled checks with the check book stubs, it was found that between Au- gust 6 and October 22, 1920, checks Nos. 36328, 36477, 36560, 36591, 36836, 36968, 37196, 37319, and 37348 were missing. As the dates shown by the stubs correspond with the dates of payments made by the bank, I am of the opinion that these checks were used for withdrawing money from the bank and were taken from the files after being returned by the bank. There were also four checks drawn to the order of various persons for amounts aggre- gating $7,103.50, which the treasurer states was for per- sonal investments.
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Check No. 35030 was drawn for $3.50 in excess of the amount called for by the warrant, and check No. 37381 was drawn for $22.52 for which there was no war- rant issued; as I am of the opinion that these amounts were in payment of personal bills, I have included them as amounts to be accounted for by the treasurer.
Check No. 37571 was drawn in favor of Geo. E. Clough for $150, for salary, but warrant No. 214 calls for only $50. I have, therefore, charged the treasurer with the overpayment of $100.
The town checks cashed by the treasurer during the year 1920, as shown by the checks on file and the original deposit slips, aggregated $13,972.31, although $21,162 was withdrawn from the bank, presumably for this pur- pose.
The cash discrepancy for the period from January 1, 1921 to January 18, 1922, was $8,730.42, making the total shortage for the period covered by the audit $25,052.65.
In checking the cancelled checks with the warrants authorized payment of town funds for the year 1921, it was found that, owing to various errors in the accounts, checks returned, aggregating $308.44, had not been credit- ed on the books as refunds, as shown by the appended tables. It was also found that receipts, aggregating $10,959.45, had been omitted from the cash book; there- fore, the cash on hand at the close of the year 1921, as shown by the town report, was incorrect by this amount.
The loan of $5,500 for the East Main street sewer and the loan of $5,000 for the Three Rivers school were issued early in December, 1921, and credited to the town account at the Palmer National Bank, but the receipt does not ap- pear on the cash book; the premium received in January, 1921, on the highway loan of $20,000 was $450, but only $250 was entered on the books as having been received; and a refund of $222.9. from the J. S. Lane Company was not entered as a receipt.
During the year 1021, the treasurer withdrew from the bank on checks drawn to the order of George E.
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Clough, Treasurer, $21,293.60 in instalments of from $300 to $800. There were also payments by the bank on Feb- ruary 18, 1921 of $300, and on February 25, 1921, of $800, for which there are no cancelled checks on file. Thus the total withdrawn in cash was $22,393.60, although the town checks cashed by the treasurer, as shown by the cancelled checks on file, aggregated only $14,063.04.
During the year 1921, the treasurer paid by check, without warrants authorizing the payments, two bills from the Palmer National Bank of $9,49 and $6.90, respec- tively, for interest on an overdrawn bank account; as the overdrafts were due to the fact that the treasurer had misappropriated town funds, I have not allowed these items as town charges.
Mr. Clough stated that, prior to October 17, 1919, when the first town chcek was issued in connection with his speculations, funds were obtained by taking cash in the office, but that when the demands upon him for funds became too great to use cash, he made town checks to the order of various persons in order that the bank would not suspect that town funds were being paid out to A. J. Young, the person with whom he was dealing in his stock transactions.
An examination was made of the memoranda ac- counts kept by Mr. Clough in connection with his stock transactions, but these accounts are so confused and in- complete as to be of very little assistance in the examina- tion of the town's accounts.
Mr. Clough also stated that after A. J. Young's ar- rest early in 1920, he used town funds only for paying in- terest on outstanding notes, reducing and paying up notes, and for his own personal expenses at times when he ran short, although the shortage in the town's ac- counts increased by more than $16,400 after A. J. Young's arrest, $8,730.42 of this amount having been taken during the year 1921.
The accounts of John F. Foley, who was acting treas- urer from January 13 to February 9, 1922, under appoint-
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ment by the selectmen, were examined, the bank account was proved with the statement furnished by the bank, and the balance turned over to Mr. R. L. McDonald, the treasurer elected at the annual town meeting, was veri- fied.
At the request of the new treasurer, Mr. R. L. McDon- ald, a new cash book, a check register, and voucher checks have been provided for his use, which will greatly assist in checking and verifying the treasurer's accounts in the future.
The accounts of the new treasurer were examined for the period from February 9 to March 1, 1922, and the cash balance March 1, 1922, as shown by the cash book and check register, was reconciled with the statement fur- nished by the Palmer National Bank.
Appended to this report are tables showing a recon- ciliation of the treasurer's accounts February 9 and March 1, 1922.
The accounts of the bookkeeper for the selectmen were examined for the year 1921, the ledger was an- alyzed, and necessary correcting and adjusting entries were made.
The outstanding departmental accounts receivable were adjusted with the records in the several depart- ments committing bills for collection. I would recom- mend that the bookkeeper keep a more detailed and ac- curat. record of the amounts due the town for ma- terials furnished and services rendered by the several de- partments, in order that the published statements may show the true financial condition of the town.
I would also recommend that the bookkeeper exer- cise more care in checking bills forwarded by the several departments for payment so as to be certain that the charges are proper ones and have not been previously paid, before placing them on a warrant for payment.
Appended to this report is a balance sheet showing the financial condition of the town December 31, 1921. From the appended balance sheet, it will be seen that a number
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of the accounts have been overdrawn. It has been the custom for the bookkeeper to charge off overdrafts against the surplus account without any authority for so doing; this practice should be discontinued and the overdrafts shown by the balance sheet should be provided for by ap- propriation voted by the town. In this connection atten- tion is called to Section 31, Chapter 44, General Laws, which provides as follows :
"No department of any city or town, except Boston, shall incur liability in excess of the ap- propriation made for the use of such department, except in cases of extreme emergency involving the health or safety of persons or property, and then only by a vote in a city of two thirds of the members of the city council, and in a town by a vote of two thirds of the selectmen."
Departmental officials should not incur liabilities in excess of the appropriations made for their departments; if the appropriations are insufficient to permit the per- formance of the work which, in their judgment, should be done, they are, nevertheless, bound by the amounts ap- propriated, as the voters have stated, in effect, that they want service only to the amount of the appropriation voted for the use of a given department; and the depart- mental officials should, as above stated, plan their work so as to bring the costs within the sums available.
The accounts of the collector of taxes for the years 1913 to 1917, inclusive, were examined and found to have been kept in a very unsatisfactory manner. The abate- ments granted by the assessors had not been posted to the commitment book, and it was necessary to post these amounts before the outstanding accounts could be listed.
The commitments for the several years were proved and reconciled with the assessors' warrants to the collec- tor.
The collections as shown by the cash books were not checked in detail to the commitment books, as payments have been made to the treasurer for which the collector can not furnish a detailed list of accounts and years to
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which the payments should be applied. It would, there- fore, be an added expense, without any satisfactory re- sults, to attempt to check the collections for the five years in detail.
I have accordingly prepared tables, which are ap- pended to this report, showing the several commitments, the abatements granted by the assessors, the payments made to the treasurer as shown by the treasurer's cash book, and the balance due the town.
The commitment for the year 1914 has been overpaid by $12.48, and the collector has made payments to the treasurer during the current year aggregating $1,352.87, but is unable to furnish a detailed list as to which ac- counis the same should be applied. It was therefore nec- essary to apply these amounts against the total amount due the town.
I would recommend that action be taken to enforce settlement of these accounts by collection or action against the sureties on the collector's bonds.
The accounts of the tax collector for the years 1918 to 1921, inclusive, were examined and checked in detail. The commitments were proved, abatements were checked with the assessors' records of abatements granted, record- ed payments to the treasurer were verified by a compari- son with the treasurer's book, and the outstanding ae- counts were listed and reconciled.
The cash on hand March 11, 1922 was verified by an actual count and the bank balance wss proved with the bank statement.
The outstanding accounts were further verified by mailing notices to about one hundred persons whose names appeared on the books as owing money to the town.
Three persons replied stating that the accounts bad been paid, and on investigation it was found that one per- son paid the account after the notice was mailed, one later admitted that an error was made in claiming that the account had been paid, and as the unpaid bill for the
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third claimant is still on file, the person has been request- ed to submit receipted bill for inspection.
Appended to this report are tables showing a recon- ciliation of the collector's cash and summaries of the tax and assessment accounts.
The town clerk's records of receipts from dog and hunting and fishing licenses were examined and checked with the records of licences issued, and proper receipts were on file showing that the funds have been properly accounted for.
Tables showing a summary of the accounts are ap- pended to this report.
The records of receipts of the cemetery commission- ers were examined and recorded payments to the treasur- er verified by comparison with the treasurer's books. The outstanding accounts were listed and adjustments made on the selectmen's ledger. The records of the perpetual care funds and the income from them were examined and verified by an examination of the books on file at the Pal- mer Savings Bank.
Appended to this report are tables showing a sum- mary of the accounts.
In addition to the departments and accounts men- tioned, the books and accounts of all departments and of- ficials receiving money for the town or committing bills for collection were examined and reconciled.
. Appended to this report are summary tables of the several accounts.
The surety bonds of the several town officials for the faithful performance of their duties were examined and found to be'in proper form, with the exception of the col- lector's bond for the year 1914, which could not be located.
While engaged in making the audit, I received the hearty co-operation of all the town officials, and on be- half of my assistants and for myself I wish to express to
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them, and to Mr. T. J. Crimmins, Chief of Police, my ap- preciation for the courtesies received and the assistance rendered.
Respectfully submitted, EDWARD H. FENTON Chief Examiner
RECONCILIATION OF TREASURER'S CASH
January 1, 1919
Balance Jan. 1, 1919, per cash book, $51,782.60
Checks outstanding, per list, 8,485.32
$60,267.92
Palmer National Bank:
Balance Jan. 1, 1919, per bank statement, $55,868.32
Receipts of 1918 deposited in bank:
Jan. 2, 1919
$3,614.62
Jan. 8, 1919
637.15
4,251.77
Cash assumed to be in office Jan 1, 1919
147.83
$60,267.92
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RECONCILIATION OF TREASURER'S CASH December 31, 1919
Balance Jan. 1, 1919, per cash book
$51,782.60 247,493.72
Receipts 1919, per cash book
Refunds and Adjustments of Over- payments not entered as receipts:
Check No. 29901
W. & L. E. Gurley, returned $15.00
Charged on warrant
Check No. 30102
W. & L. E. Gurley, cashed,
11.57
No warrant for same 3.43
Check No. 30211
Central M. E. Co., returned $25.27
Charged on warrant
Check No. 30248
Central M. E. Co., cashed,
17.47
No warrant for same 7.80
Check No. 33908
C. H. Bannister, returned,
25.00
Duplicate charge
Warrant No. 90
in excess of check No. 31277
.05
$299,312.60
Payments 1919, per cash book,
Corrected balance Dec. 31, 1919,
$246,072.83
53,239.77
$299,312.60
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