State auditor questions Ludlow’s finances

Posted July 07, 2010, at 9:12 p.m.
Last modified Jan. 29, 2011, at 11:54 a.m.

LUDLOW, Maine – The state auditor, who has completed her review of the town’s finances, has found discrepancies and items she has questions about, but intends to wait for Ludlow’s Board of Selectmen to decide what action to take next.

State Auditor Neria Douglass said one of her findings was that an audit submitted for the town for 2009 was a “false audit,” meaning it was not done by an auditor.

Douglass said Wednesday evening that her office has completed an audit of the town’s finances that began in February. She has issued a preliminary report for selectmen and said she will be available to go to the town to talk to residents about her findings if desired.

The town’s selectmen could not be reached for comment on Wednesday evening

Town Manager Mary Beth Foley, who resigned last week, was suspended by selectmen in February after Douglass subpoenaed financial records from Ludlow for fiscal years 2007, 2008 and 2009. The auditor received a complaint and verified that the state had not received several years’ worth of municipal audits from Ludlow, an Aroostook County town of about 420 people located about seven miles west of Houlton.

During the special meeting in February, residents learned that the last audit of town finances was done five years ago. Douglass said state law requires that a town conduct an audit each year. The penalty for failure to do an audit is $100.

The town office has been closed since Foley’s suspension. Foley also could not be reached for comment Wednesday.

Douglass said Wednesday that she found there was approximately $3,500 that was unaccounted for between January and March of 2008. She also discovered that some people who did not live in Ludlow registered their cars in the town, which means that the communities those individuals actually lived in at the time did not get the revenue from the registration process.

Douglass also said she has questions about payments that were made to Ted Ivey, one of the town’s selectmen.

In February, Selectman Greg Dow combed through available financial records at the office and drafted a written statement detailing checks issued for payment by the town and to whom they were issued.

The statement also showed the amount for which each check was written. Dow presented those details using financial information from December 2006 to December 2009.

Dow’s statement showed that Ivey was reimbursed numerous times for “mileage” as well as for “labor,” “labor and mileage,” “tire repair” and “trailer or truck repairs.” Residents said that Ivey often drove to locations such as Bangor and Portland to pick up food for the Ludlow Food Pantry and was reimbursed for the mileage.

Douglass said that some of the receipts for payments made to Ivey for labor lacked detail, adequate documentation and there seemed to be no contractual basis for why he was being paid by the town. She said that at one point he received $900 in one day without any documentation and a number of times he received two payments for one day.

“My question is ‘Why?’” Douglass said Wednesday. “There is no documentation for that.”

Ivey also received payment from the town for “stolen tools,” Douglass said. But she could find no police report or other documentation regarding that payment.

The state auditor said that some of the record keeping was clearly “shoddy work” and said that an audit report that was submitted to her office for the town’s finances in 2009 was not completed by an auditor at all.

Douglass said that fact came to light when one of the selectmen called the auditor who supposedly did the audit to ask if he had been paid. The auditor told the selectman that he did not do an audit for the town and also called Douglass’ office to let her know.

While the penalty for failure to do an audit is $100, Douglass said Wednesday that she has no intention of seeking that money from the community. She said that it is now up to the town to decide what they want to do next.

The town has yet to have a town meeting and will likely do so in August, according to residents of the community.

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