Ludlow set to decide finances in April

Posted Jan. 07, 2011, at 12:11 a.m.

LUDLOW, Maine — Town officials said Thursday that townspeople likely will decide in April whether to give to law enforcement information regarding financial discrepancies found by the state auditor in the town’s financial records.

Town Treasurer Noreen Foster said the town will hold its annual meeting at the end of April, which she said would be the appropriate time to discuss what to do about a situation that arose last February and led to the suspension and resignation of former Town Manager Mary Beth Foley.

The state subpoenaed financial records from Ludlow in October 2009 for fiscal years 2007, 2008 and 2009 after receiving a complaint and verifying that the state had not received municipal audits for several years.

Foley, Ludlow’s town manager for the past 14 years, was suspended without pay early last February and resigned five months later.

State Auditor Neria Douglass issued a letter to residents handed out at a special meeting last summer stating that she found items of concern in the records she had examined.

Douglass said she found that more than $3,000 was unaccounted for between January and May 2008. Records on tax liens were “poor and open to error,” she wrote.

She also said checks for more than $1,000 written to charities were not delivered in February 2008 and 2009 but were reported in town reports as expenditures. She said some people who did not live in Ludlow registered their cars in the town, which means the communities those individuals actually lived in at the time did not get the revenue from the registration process.

The state auditor noted that even though town reports indicated volunteer work was being done at the Ludlow Food Pantry, the town still was paying substantial amounts of money listed as labor and mileage related to food pantry activities. Douglass said she could find no “contract, detail or basis for the payments.”

She also addressed payments made to Selectman Ted Ivey. According to town financial records, Ivey was reimbursed numerous times for transactions labeled as mileage as well as for labor, labor and mileage, tire repair, food pantry and credit.

Residents said 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 some of the receipts for payments made to Ivey for labor lacked detail or adequate documentation, and there seemed to be no contractual basis for payments made to him.

He also was paid once for “stolen tools,” for which Douglass said she could find no documentation.

“The payments raise concerns about self-dealing and conflict of interest,” Douglass wrote.

The state auditor also noted that “a law in effect in 2009 prohibits a clerk from commingling personal funds with town funds,” which she said the town seemed to be ignoring.

Douglass also said someone submitted a “false audit” to her office, or an audit that was not completed by an auditor at all. The audit report was submitted to her office for the town’s finances in 2009 and contained obvious errors, according to Douglass.

The false audit was discovered when one of the selectmen called the auditor who supposedly did the audit to ask whether 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.

Douglass said she would not press charges and would let the town decide what to do about the discrepancies. State law mandates that a town conduct an audit each year. The penalty for failure to do so is $100. Douglass said she also would not penalize the town for failing to do seven years of audits.

At the special meeting last August, residents made clear that they wanted Foley’s handling of the finances investigated further and for her to be criminally charged if it is warranted. No formal action was taken at the time, however. Townspeople also voted to implement stricter financial controls.

Town Manager Diane Hines and Selectwoman Virginia McCain said Thursday that the Board of Selectmen had discussed whether to hand the findings of the state auditor over to law enforcement but had made no decisions.

Foster said it was something selectmen felt had to be decided by the people.

“I think it should be up to them to decide,” she said Thursday. “We all have the findings now, so I expect that decisions will be made in April.”

Both Foley and Ivey have been unavailable for comment and could not be reached Thursday.

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