Article 6
May 2009 Business as usual!
A Report on the Town's continuing mess....READ MORE
Article 5
March 2009 Betrayed!
A Report on Barrett-Egan's Broken Promise to the Town-
Fighting the expansion of Gravel Mining....READ MORE
Article 4
February 2009 The Financial Mess Continues! An (apparently) on-going study
of the inept, irresponsible and unethical management of the town’s finances in the hands of Supervisor Barrett, our purported Chief Financial Office ...READ MORE
Article 3
January 2009 Milan's Financial Mess
A Study of the Inept, Irresponsible and Unethical Management
of the Town’s Finances in the Hands of Supervisor Barrett,
Our Purported Chief Financial Officer
...READ MORE
Article
2
January 2009 Our Future– and our property values –
are in the hands of THESE GUYS?
Observations on the Town’s Year-end Reorganization Meeting
...READ MORE
Article 1
December 2008 Veuve Clicquot, anyone?
The observations of one outraged Milan resident on the planning of the Town’s 2009 budget...READ MORE
FINANCE 101/102
A Tutorial Prepared Especially for Our Town’s Republican Management No.7 in the Series, from an Outraged Milan Resident
June 2009
Good morning, class. Welcome to Finance 101/102, a course that will provide basic financial definitions and descriptions, and will demonstrate how an understanding of these core components can impact the financial health and well-being of a business . . . in this case, a town. Everyone, please be seated. And Supervisor Barrett and Councilpersons Egan and Byrne, please take seats right up front.
Let’s start the lecture by quoting Dictionary.com on two key definitions, accounting and bookkeeping:
Accounting (uh-koun-ting)—noun: 1) The theory and system of setting up, maintaining, and auditing the books of a firm; 2) The art of analyzing the financial position and operating results of a business house from a study of its sales, purchases, overhead, etc. (distinguished from bookkeeping); 3) A detailed report of the financial state or transactions of a person or entity (e.g. an accounting of the estate); 4) The rendering or submission of such a report.
Bookkeeping (book-kee-ping)—noun: The work or skill of keeping account books or systematic records of money transactions (distinguished from accounting)
For most of us, I would now be inclined to say “Tutorial over. Class dismissed.” However, it seems our Republican supervisor remains profoundly clueless as to the differences between these two basic financial functions. (And, since they remain mute on the matter, this cluelessness is apparently shared by his Republican cohorts, Councilpersons Egan and Byrne). In addition, and as exhibited, once again, at the last town board meeting on June 6th, Supervisor Barrett retains a persistent belief that his job, as “CFO” of Milan, is to disseminate page after page of incoherent bookkeeping print-outs laughingly referred to as a monthly “financial report.”
This would suggest the need for further instruction, at least for these individuals. So the tutorial will continue . . . .
Accounting is a high-order skill. It requires complex, conceptual and analytical thinking, most often learned only after several years of schooling and training. Those of us who successfully run businesses know that much of that success can hinge on the level of expertise (or lack thereof) of the accountant who has been hired to help coordinate the financial picture—i.e., set up “the books.” In so doing, the accountant acts as an ad hoc partner with the CFO of that business (or, if no such official title exists, the person acting in CFO capacity), each relying on agreed-upon financial architecture and goals, and an intelligent and solid line of communication. Good accounting and CFO partnering results in the Colgate-Palmolives of this world; bad accounting and CFO partnering results in the Enrons.
Bookkeeping, on the other hand, is a low-order skill, acquired after only some schooling, often even learned “on the job.” However, this is not to say that anyone can be a good bookkeeper. The skill requires diligent, competent, detail-oriented thinking, with bookkeepers frequently exhibiting the personality traits and work ethic of true and staunch foot soldiers, ready and waiting at their posts to take orders. These orders, of course, should come from the business’s financial management—i.e., the CFO/accountant “partners.” Once these players have established the conceptual financial framework of the business and the way in which the subsequent accounting systems are to be established—how “the books” are to be kept—the bookkeeper’s main responsibility to this team is the entry of accurate and timely data—no more, no less.
So, class, let’s refer again to the June 6th board meeting and see where Milan stands vis á vis its financial management team and the way in which it does business:
Milan has no accountant. The town has a “CFO” (Supervisor Barrett) who doesn’t understand his job, an accountant’s job or, for that matter, a bookkeeper’s job. And Milan has a bookkeeper who’s working her proverbial butt off, trying to do everyone’s job! No wonder we’re getting farther and farther up the creek without a paddle!
And it seems our supervisor would rather continue to call in any number of stray bookkeeping consultants, indeed would rather continue to focus on and blame the bookkeeping and the bookkeepingsoftware,than even consider calling in a municipal accounting firm for consultation
.
For the record, let’s do a quick re-cap of these many bookkeeping efforts and the (non-budgeted) costs associated with them to date. First, there have been all the additional hours spent by Barrett and the bookkeeper trying to learn the QuickBooks software, at a cost to the town of who-knows-what; then, last year, wanting to rid himself of the demon QuickBooks, there was the illegal contract entered into by Barrett with a software supplier, Barrett’s subsequent reneging on that contract, and the thousands of dollars of legal fees that were spent getting the town off the hook; then, again trying to replace the demon QuickBooks, there was Barrett’s purchase of the FundEZ software for around twenty-three hundred bucks (which was, alas, to no avail); and next there was the QuickBooks consultant (aka, salesperson) brought in by Barrett who didn’t cost us anything for her visit but who, Barrett claims, has recommended that “at the very least” the town buy the latest version of QuickBooks (oh, really?); and, saving the best for last, there’s the latest bookkeeping consultant from Hyde Park whose meeting with Barrett has cost us yet another several hundred dollars, and, if Barrett/Egan/Byrne push through the purchase of the RDA software this bookkeeper is familiar with and is recommending, will cost the town around twenty-five thousand dollars!
In the meantime, Democratic Councilpersons Ross Williams and Diane May—as they have done, now, for so many meetings in a row—sat there again this month, shaking their heads in disbelief. Once again, Councilperson May suggested that the town consider hiring a municipal accounting firm to straighten out the mess. She reported to the board that she had contacted one of the more reputable ones in the area—Pattison, Koskey, Howe & Bucci, CPAs, P.C.—who have offered to come in for a free consultation. But no, our Republican representation—Barrett/Egan/Byrne—shot down that idea, presumably in lieu of spending yet more money on bookkeeping consultants and bookkeeping software packages.
And so the mismanagement—and madness!—continue. And soon it will be time to begin budget planning for 2010 . . . and we still don’t have closed books for 2008! And Barrett continues to blame the bookkeeping and the bookkeeping software and the past Talmage administration. (By the way, the books under Van Talmage always received passing grades from the NYS Comptroller’s Office for the financial management of Milan; unlike the previous Jeffries administration which, I am told, was cited by the state at least five times for infractions.) But sure, yes, why don’t we call in some more bookkeeping consultants and buy some more bookkeeping software. And look, out there on the front lawn of town hall… is that another new bookkeeper I see coming through the door from the general direction of Hyde Park?
Final grade for Supervisor Barrett, and Councilpersons Egan and Byrne: F.
