Piazza Sworn In, Questions Caldwell's Past Practices

Sitting at the dais for the first time Wednesday night, Caldwell's newest councilman questioned the borough's past record keeping and previous accounting practices as members of council approved the corrective action plan for the 2009 audit report and adopted the 2010 municipal budget.

Doug Piazza, who had already been officially sworn in by Municipal Judge Donald O'Connor, took the oath of office again so his wife, Amy, could be by his side prior to the special public meeting.

Piazza, who was appointed earlier this month as an interim replacement for former Councilman Gordon Lawshe, read a statement prior to the council voting on the corrective action plan, questioning the borough's transaction reporting system over the past several years.

"After reviewing the 2009 audit, general comments, recommendations and corrective action plan, I do have a question: Based on the information I just mentioned, am I to understand that the Borough of Caldwell does not currently, nor has it previously, had in place a proper accounting and reporting system, including maintaining a general ledger or fixed-asset training, has not been performing proper reconciliations or analysis of several key accounts, including expense reports and payrolls and currently has a few outside offices, which do not properly track or record cash transactions?" Piazza asked.

"Also, the prior year audit of 2008 reveals that at least the general ledger and asset tracking issues were disclosed and apparently ignored," he continued. "Considering that these are all requirements by the Division of the Local Government Services since 1987, I would like it if someone can explain why these issues even exist."

Heidi Wohlleb, the borough's auditor from Nisivoccia & Co. LLP, said these are issues her firm has seen with other municipalities of similar size to Caldwell due to a lack of funding or personnel to properly maintain these areas.

However, Wohlleb and members of council agreed that the addition of Margaret Cherone, the borough's new chief financial officer, will begin to resolve these issues.

"I think part of it was that the personnel that was here before Marge was appointed as CFO, they just didn't have the knowledge or the understanding how or how to prepare a general ledger," Wohlleb said. "I think with Marge in place, she has the necessary understanding so that will be put in place."

Councilmen Joseph Norton and Richard Hauser pointed out that these concerns were some of the reasons why they ran for council over the last few years.

Norton said the recent personnel changes, which also include the addition of Paul Carelli as borough administrator, are measures he believes will ensure these issues will not continue.

"I'm confident moving forward with 2011 with everything that we have in place, a lot of the questions that you raised and have been raised year in and year out over the last couple of audits will be corrected," Norton said to Piazza. "As chairman of the finance committee, I'm comfortable and I'm looking forward to working with Marge and Paul and getting a lot of these situations corrected."

Hauser, however, cautioned that these changes will not happen immediately.

"I don't mean to set the bar too low for Marge. I have high expectations for Marge. But I think, unfortunately, it would take quite a bit of an effort, quite a bit of staffing, quite a bit of money to try to tackle all of these," Hauser said. "Frankly, I'm not sure that all of the issues that have been addressed in the audit can be resolved by the end of the year. I don't want to create false expectations."

Cherone said she has established priorities and identified maintaining a general ledger and addressing the fixed assets issue as the most important items on her list.

"The priorities have already been established," she said. "The general ledger is No. 1 in the financial structure. No. 2 would be the fixed assets. Beyond just what the balance sheet shows, there are other cost factors associated with those fixed assets. Are they insured adequately? Are they even insured? Those are certainly my priorities going into the last quarter of the calendar year."

After the adoption of the 2010 municipal budget was delayed earlier this month when only three councilmen approved the appropriations, the necessary four affirmative votes were cast Wednesday night.

Council President Ann Dassing, Councilman Peter Murray, Hauser and Norton voted in favor of the of approximately $36 to the average borough household, while Piazza abstained from voting since he said he was not part of the process. Councilman Kay Slattery, who has been against the budget, was away on vacation.

"In retooling the budget, a lot of different concepts were put forth in regards to cost-cutting measures," said Norton, chairman of the finance committee that also includes Dassing and Hauser. "I'm confident in saying that this budget represents a responsible, long-term, goal-oriented, financial structure for the borough not only in 2011, but for 2011 and beyond."

Hauser, who pointed out the borough avoided layoffs and furloughs when the state's unemployment rate is at about 15 percent, said the tax increase could actually be cancelled out by the recent reduction of sewer-user fees by approximately $40 for each connection.

Mayor Susan Gartland also clarified that four of the five other municipalities that use Caldwell's sewer service are current in their payments for 2010.

Cherone had pointed out earlier this month that North Caldwell hadn't paid this year. According to Gartland, North Caldwell is current for 2010, but owes $60,858 in previous fees.

West Caldwell made a full payment this week for 2010 to date in the amount of $1,048,135.77, Gartland said. While Roseland and Essex Fells are also current for the year, Fairfield's council was expected to approve this week its township's payment of approximately $21,000, Cherone said.