Adjustments To Revolving Funds Recommended

HARWICH -- After an extensive review of the 12 revolving funds that have been overseen by various town departments over the past 16 years, Finance Director Jennifer Mince concluded that while no money is missing from the accounts, there are operational adjustments necessary to comply with town bylaws and regulations.

Mince reviewed the 16 years of ledger detail, matched line by line against the town meeting warrants and recorded votes but not against the town’s own summary of those votes, because that summary turned out to have errors, she said.

She described a revolving fund as a means for collecting a fee from someone signing up for a youth basketball program, buying a cemetery lot, or joining the weight room in the community center. Instead of going to the general fund, the money goes into a separate account and the funds must be spent on the programs generating the revenue, which are capped by town meeting.

 “Those three rules are where almost everything in the review went wrong,” she said. “Not the spending itself, and not anyone’s honesty, but whether the spending was authorized, whether the money came from the right place, and whether anyone was checking.” 

Members of the select board and the finance committee have been pushing for a review of the use of revolving funds in town for a few years. 

 “Zero of this is about blame. It’s about rules that changed and institutional memory as people moved on,” said Mince, who started the review the day she came to work for the town 10 months ago. 

 Mince went through the dozen revolving funds, identifying some in need of fixing, citing payments made for wrong purposes. One fund is no longer in use, and a couple she recommended be changed from revolving to reserve funds. 

 In her findings, Mince said every payment received, every deposit, and every cash balance reconciles across the 12 accounts for the past 16 years. Every dollar went to a town purpose: coaches, supplies, equipment, staff. Some of it was outside what that fund was authorized to buy, which is a problem, but none of it went anywhere it should not have. Every fund closed fiscal 2026 with a positive balance. No fund has ever carried a deficit into the following year, she said. 

 “What went wrong was authorization, record keeping and oversight,” Mince said. “Money was spent on things these funds were not allowed to pay for, and nobody was checking.”

 The recreation department spent more than the town meeting cap placed on the fund in 10 of the 17 years, according to the report. The department’s ceiling was set at $175,000 from 2020 to 2026, though the fees for programs grew from $134,876 to $342,320. Over those 10 years, $338,785 was spent over the cap set by town meeting. There were also issues raised about program payments going into a single account so the fund could not show which programs were paying for themselves and which were not, according to Mince.

 There was an issue relating to weight room-generated funds at the community center being used to pay wages. The revolving fund is supposed to be spent on weight room maintenance and repairs, but that fund, according to Mince, paid $332,995 in wages since 2010, including $92,012 last year.

 The bylaw establishing the fund also requires the weight room fund to receive 75 percent of the funds it generates, with 25 percent to be placed in the town’s general fund. That was not happening, according to Mince.

 Town Administrator Jay McGrail said the decision to use the funds to cover wages was not made by Community Center Director Carolyn Carey. That was a decision made by a previous administration, McGrail said. 

Mince said the cultural arts municipal building has never exceeded its spending ceiling. However, for several years its receipts and the community center‘s receipts were recorded under the same generic descriptions, so the books cannot say which building a given deposit came from. That is a records problem rather than a missing money problem, she said.

 Mince also said the cemetery lot sales fund needs to be fixed. According to the bylaw, maintenance is paid with 90 percent of lot sales and all cemetery service fees. Every dollar has been posted to one ledger called lot sales, though the bylaw treats lot sales at 90 percent and services fees at 100 percent, so this split cannot be verified. Mince recommends breaking the one revenue line into lot sales, interments, foundations, deed fees and other services so the percentage split can be verified. 

 Mince also said the golf infrastructure and golf capital improvement funds are not revolving funds; they are reserve funds. She recommended the golf infrastructure monies, generated through an annual surcharge to golf members, should be placed in the golf capital improvement fund, and that an article be brought to town meeting moving those funds onto the capital improvement fund.

 The report also points out the Albro House revolving account is no longer generating revenue and the wetlands revolving account is barely in use. Two revolving accounts rated as healthy by Mince are the golf pro shop and council on aging funds.

In an overview of the conditions in the report, Mince wrote that issues resulted from funding ceilings being set and forgotten; a lack of oversight; and money filed by description, not programs.

Mince crafted six rules for the operation of revolving funds. She said the principle behind the six rules is “A fund receives only what it is authorized to receive and pays oly what it is authorized to pay.”

Select board members were pleased with the report.

 “I knew you were going to be an asset to this town, but I had no idea at that level,” select board member Jeffrey Handler told Mince.

 “Jen is the right person at the right time because no one before you was watching it because there was no set of rules,” added board member Donald Howell. 

 Select Board Chair Peter Piekarski praised the report as important to the level of transparency in town finances.