Ludlow goes to authorities about financial discrepancies

Virginia McCain, left, and Greg Dow, two members of the Ludlow Board of Selectmen, review financial statements during the annual town meeting on Monday evening. Approximately 40 residents attended the nearly two-hour meeting. Although voters made some cuts to the overall budget, the mill rate in the community is still expected to rise by three to four mills.
Jen Lynds | BDN
Virginia McCain, left, and Greg Dow, two members of the Ludlow Board of Selectmen, review financial statements during the annual town meeting on Monday evening. Approximately 40 residents attended the nearly two-hour meeting. Although voters made some cuts to the overall budget, the mill rate in the community is still expected to rise by three to four mills.
Posted April 26, 2011, at 7:04 p.m.
Last modified April 27, 2011, at 8:49 a.m.

LUDLOW, Maine — The town’s Board of Selectmen has turned over to the Maine Attorney General’s Office information regarding discrepancies in the town’s financial records that were discovered by a state auditor.

That news and other municipal information were part of the annual report presented to taxpayers during Ludlow’s annual meeting on Monday evening.

Selectmen have declined to talk about their decision to hand over the information, apart from making it known in the town report. A spokesman for the AG’s office also said the office would have no comment on the matter at this time.

Former manager Mary Beth Foley was suspended last February and eventually resigned after 14 years at the helm after the financial irregularities came to light. 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.

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 more than $3,000 was unaccounted for between January and May 2008. 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 raised questions about expenses related to the Ludlow Food Pantry and also addressed payments made to former 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 then was reimbursed. 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.

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. 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.

During Monday’s meeting, taxpayers passed most of the articles on the 29 article warrant. They rejected the idea of doing away with their roads commissioner and also refused to appropriate $8,100 to finance updated tax maps. Town Manager Diane Hines said the town’s current tax maps haven’t been updated since approximately 1974. Still, residents said they didn’t think the expenditure was necessary and refused to approve it. To save approximately $16,000 in interest fees, taxpayers agreed to appropriate $132,000 to pay off a loan borrowed to rehabilitate its roads. The money will come from the town’s surplus account.

Even though taxpayers made some cuts, Town Treasurer Noreen Foster said the mill rate is expected to increase by 3 or 4 mills. The current property tax rate is about $16.20 per $1,000 of valuation. A number of attendees were concerned about the increasing cost of taxes, and pointed out that uncollected taxes for 2010 totaled about $67,705. The town currently is spending 54 percent of its income for municipal expenses and 42 percent to fund SAD 70.

In elections, David Stevens bested Melissa Ivey for a spot on the SAD 70 school board, and incumbent Virginia McCain retained her seat as a selectman.

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