Apparent Accounting Error Stymies Community Preservation Committee

HARWICH – The community preservation committee planned to vote last week on a slate of funding applications to forward to town meeting, but was stopped short because of an apparent accounting error.

 Accountant Renee Davis of CBIZ, working with the community preservation committee (CPC), said her firm has been analyzing the committee’s financial records back to 2019, and discovered what appears to be a bookkeeping mistake that temporarily makes it difficult for the committee to know exactly how much money it has available to award in grants.

 The community preservation committee receives its money each year through a 3 percent property tax surcharge, supplemented by the state, and is charged with using those funds for projects related to housing, historic preservation, open space acquisition or recreation. Each year, the town is required to reserve 10 percent of the receipts for each of three reserves, which Davis called “buckets,” specifically for housing, historic resources and open space, with remaining money going in an undesignated fund for use for any qualifying project. 

Since 2005, the Harwich CPC has funded a host of projects including the improvements at Brooks Park, restoration work at Brooks and Chase libraries, support for the Harwich Affordable Housing Trust and restoration of the historic South Harwich Meeting House. 

 Each year, the town’s financial team is required to determine how much money was actually collected for Community Preservation Act projects, and compare that with the estimates used for each year’s budget. With that new information, the town is required to ensure that the 10 percent set-asides were correctly calculated, and correct for any substantive differences in those three reserve accounts.

 “The punchline? That hasn’t been happening,” Davis told the CPC at its Feb. 13 meeting. The apparent error doesn’t change the total amount of money the CPC holds, which is not in dispute, only the amounts in the three reserve accounts, she said.

 “We know overall there’s no money missing, but the buckets aren’t aligned because of that,” she said. The problems apparently began in 2021, and Davis said she is still trying to verify with the town accountant and treasurer that an error was actually made.

 “I’m not sure what they were trying to do. They didn’t leave a good trail,” she said. “Overall, if we look at what they should have done for revenue, and what they didn’t do for revenue, we’re off about a million dollars,” she said. But Davis stressed that no money is missing, it’s just apparently in the wrong reserve accounts.

 “In total we’re good, but in the buckets we’re not,” she said. “The problem is, it restricts you a lot more where you can spend your money,” since the committee doesn’t know exactly how much money is available in each account. 

The committee was poised to vote on 12 different funding applications last week, but Chair David Nixon said he favored deferring that vote.

 “I’m not comfortable calling for a vote with the amount of information that we have, with the missing pieces that are still there,” he said. Nixon apologized to the applicants who came to last week’s meeting hoping their projects would be forwarded to town meeting for consideration. 

He said he’s not interested in assigning blame for the apparent mistake. “We’re getting it corrected. And that’s what the bottom line is going forward,” he said.

 Harwich has had a marked lack of stability in its financial staff in recent years. Finance Director Kathleen Barrette resigned last August; over a two-year period, three finance directors have resigned. An interim director is in place, and the town has set a March 1 deadline for applicants for the permanent post. Treasurer/collector Krystle Legendre took over after a previous appointee was terminated at the end of her six-month probationary period. Several other members of the town’s financial staff have retired in recent years.

 Davis said she planned to verify her findings with town staff and meet again with the CPC on March 6 to help the committee identify the best way to correct the apparent error and move ahead with its recommendations for this year’s projects.