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Revere financial audit turns up nearly $800,000 to be returned to the city’s general fund

REVERE — Two employees of the city’s Parking Department have been placed on unpaid administrative leave following an external review of the city’s finances that turned up more than $2.2 million.

Of the $2.2 million, at least $790,0000 will be returned to the city’s general fund, Mayor Brian Arrigo said during a city council meeting Monday night. A portion of the money will be returned to state and federal sources, he said.

The audit was commissioned by Arrigo in March of 2016, shortly after taking office. He sought to review all city departments and financial accounts and operation policies and procedures.

CliftonLarsonAllen, an audit, tax and consulting firm, reviewed various activities and internal controls of city departments. It was discovered that 86 separate budgetary funds with cash balances had no revenue or expense activity recorded since 2014. Some funds did not have activity recorded to them since as far back as 1998, according to Arrigo.

Following the audit, Arrigo said he ordered an independent audit of the Parking Department, which found that only 145 of the city’s 274 parking meters were operational and a significant decrease in revenue.

“The stark numbers are alarming,” Arrigo said.

Parking revenue exceeded $100,000 from 2002 to 2011 and reached more than $140,000 in 2010 and 2011 but began to decline in 2012. Parking meter revenue was down to $0 in the 10 months that preceded the audit, said Arrigo.

The review found about $90,000 in revenue unaccounted for within the department within four years. That led to two workers being placed on unpaid leave while the matter is investigated.

“I have referred this issue to law enforcement,” Arrigo said.

He credited the loss of parking revenue to underutilized enforcement, missing signage, high ticket to appeal rates, among other things.

Arrigo said a reform of the department has already begun with the hiring of a new parking clerk and the addition of smart meters along Broadway.

City Councilor Dan Rizzo questioned how 10 months of zero revenue could go unnoticed, and other councilors questioned how the employees could be placed on unpaid leave while the investigation is still active. Arrigo said the Attorney General’s Public Corruption Unit is leading the investigation.

“I just think that you’re innocent until you’re proven guilty,” said Councilor Joanne McKenna. “I think it’s unfair for you to let them go until you find the facts that are true.”

CliftonLarsonAllen reviewed all active funds reported on the MUNIS accounting system and detailed descriptions of the purpose of the funds, revenue sources, and expenditure types expended from the funds over the past two years. It was determined whether each fund was created and in compliance with Massachusetts General Law.

The Department of Community Development and its management, accounting and reporting of federal grants was reviewed, and transactions and relationships the department has with non-profit organizations were identified and reviewed.

The firm reviewed the city’s compliance with the state’s uniform procurement act, the stipends paid to city employees or officials, and the city’s cash receipt policies and procedures.

In addition to the money that will be returned to the city, the firm recommended the city create a standardized, comprehensive cash receipts policy and procedure manual. The manual would include information specific to each department and employees would be trained about the updated policies and procedures to promote consistent application.

It was also recommended that the city’s auditor send interim general ledger reports of revenues to all departments for review, review safeguarding procedures for handling cash, consider allowing credit card payments for activities that don’t already allow for it, review policies and procedures for reimbursing petty cash and implement new solutions to enhance timeliness of reimbursements, and recommend the treasurer and collector’s office record all cash receipts using the MUNIS cash receipt module.

A discussion on the audit’s finding will be continued on Aug. 27.

 

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