West Haven City Hall
WEST HAVEN — State oversight officials offered words of advice to an accounting firm tasked with conducting an organizational financial analysis of West Haven: set clear deadlines and get documentation.
Consultants with Connecticut-based accounting firm Whittlesey introduced themselves and described the scope of their work to members of the Municipal Accountability Review Board earlier this month to explain how they would determine gaps in the city’s policies and procedures. The subsequent analysis is intended to act as a roadmap for a MARB-appointed financial manager that will work within City Hall to assist the city in tightening its organizational and financial procedures.
Edward Engberg, a partner at Whittlesey, said the firm will perform walkthroughs of internal processes and procedures in four phases, starting with the issues that pose the highest risk to the city. Included in those processes will be an analysis of human resources with a focus on recruitment and hiring processes as well as staffing levels, skill sets and qualifications of management level staff; a cybersecurity analysis; and financial management practices.
The city initially was brought under the MARB’s review in 2017 following a deficit bonding maneuver. West Haven later became the state’s first municipality to be escalated into Tier IV, the highest level of MARB oversight, following what members described as a pattern of noncompliance with their recommendations as well as numerous scandals — including the theft of $1.2 million in funding for pandemic relief programs, which happened when a former state representative working in City Hall exploited loopholes in the city’s financial and staffing processes and its lack of adherence to its existing financial policies.
Weary MARB members advised the Whittlesey team that they should be prepared to deal with potential stonewalling from the city. Auditors with firm CohnReznick, hired by the state Office of Policy and Management to conduct a forensic audit of the city’s Coronavirus Relief Fund expenditures and the financial processes and controls behind the expenditure of that grant, were in City Hall doing field work beyond the scope of their contract after city officials reportedly were unable to provide requested documentation; in doing so, CohnReznick auditors overlapped with the independent auditors hired by the city to complete its 2021 fiscal audit.
“Have a very, very specific and drop-dead timeline where you need the information to get the job done,” advised MARB member Stephen Falcigno.
“I would strongly emphasize to support any statements made by city officials as far as process and compliance that there’s physical evidence, whether it’s emails for requests or emails back for acceptance or anything like that,” said MARB member Patrick Egan.
Engberg said Whittlesey’s charge is “not just dialogue” and will require supporting documentation.
MARB member David Biller said West Haven officials’ attitude in the past to recommendations has been, “Thanks, but no thanks.”
“Do we have any tools at our discretion to make sure the city actually implements some of these procedures that are going to be recommended to them?” Biller asked.
“They won’t be able to do contracts, they won’t be able to do budgets, they won’t be able to do any of that stuff without this board’s approval,” said OPM Secretary Jeff Beckham, who chairs the MARB. He said those tools can be used as leverage to ensure the city complies with recommendations.
Statutorily, exiting the MARB requires that a city must have three consecutive years without an operating deficit and a consistently positive bond rating. However, former OPM Secretary Melissa McCaw said she did not expect West Haven to be allowed to exit the MARB’s oversight until the city’s issues with financial “infrastructure” were addressed and improved. At this month’s meeting, Beckham indicated he, too, did not anticipate West Haven’s imminent exit from MARB oversight.
“This is probably a yearslong process,” he said.
Brian covers all things West Haven. He has worked for the Register since September 2015 where he has spent most of his time writing about schools and education.