New Financial Controls Improve Fiscal Security At City Hall

The arrest last week of a city treasury clerk accused of stealing up to $7,000 from City Hall was more than just the result of an investigation of an isolated incident of potential fraud.

According to Mayor Leo Fontaine and Finance Director Thomas Bruce,  the discovery that Michelle Giguere was and manipulating the city's books was part of a lengthy mission by the administration to increase the system's security.

"This was part of a long term process we've been working on to better increase financial controls," said Bruce. The administration is implementing new software and a review process that they hope will minimize the risk of such fraud now and into the future.

Accountants found evidence that the clerk of seven years had taken cash payments from residents paying the city for services such as water and tax bills, then altering the balance during the physical recording of the transations. Bruce explained that clerks do not have access to alter the computer records, which can only be changed by administrators.

More information regarding the arrest and the depth of the discrepancies in city books may be released soon. Fontaine and Bruce would not give details of the financial department's ongoing efforts to uproot fraud, warning that too much information could jeopardize their investigatation.

"All types of accounts are currently being reviewed and do represent the correct balances," he said.

The review process began when Bruce first took control of city books in late 2009 to find that a software system had been only partially implemented. The double-system created by the partially installed software created problems in both efficiency and tracking.

"When I first came in, the primary thing that needed to be addressed was fragmented accounting," he explained. "The audit that we're preparing for this year will be a lot easier."

Auditors who reviewed the city's system last year deemed it adequate and did not initially catch the discrepancies.

"This was not prompted by the auditors, but noticed through pro-active reviews," explained Bruce. The finance director, along with the Controller Christine Chamberland and Fiscal Officer Cindy Russell have been examining city records and reviewing transactions independently.

"Our whole goal since we got into office has been to work closely with our auditors to identify such areas for improvement," said Fontaine. "When Tom and I came into the administration, we knew one of the things we wanted was to look at cash transactions. There were some transactions far exceeding the amounts allowed by policy."

As a result of the investigation, Bruce said the city will likely make changes to how the they handle money in the future, including centralizing all cash collections to minimize the risk of fraud.