HEY, BUDDY, CAN YA SPARE a poor homeowner $52,000? Too much to ask? Okay. How about $47,000? I know you keep that much cash on hand. And after all, it’s not your money, is it.
The taxpayers of the Village of Chatham have good reason to believe there might be “spare” cash stashed here and there after the Village Board announced last summer that the village had not paid $52,104.07 in federal payroll taxes. Turns out that the money was hiding in a special missing money account. It just hadn’t been sent to the IRS.
Well, lots of people “forget” to pay the IRS on time. The village forgot to pay on time for more than two years. The IRS said, “Fine.” Actually the agency said, “Fines and interest” adding up to $18,112. If you think that’s harsh punishment for an innocent mistake, keep in mind that it’s $12,000 less than the IRS originally demanded.
When this costly error was disclosed last August, the press release accompanying it said that current village Treasurer Robert Patterson had reviewed village records and found “other possible discrepancies… but these have generally not exceeded amounts in the hundreds of dollars.” That was a big relief until last month when, just in time for Christmas, the board revealed that there was, um, a matter of the $47,000 in payroll taxes owed to the state. Those funds were probably in another village missing money account. Maybe it’s easier to keep track of missing money if you put it in separate accounts.
The New York State Department of Taxation and Finance has now received payment for back payroll taxes owed by the Village of Chatham. All that remains is a possible $25,000 in penalties the state wants. Will the state tax agency, like the IRS, give the village a break? If not, the taxpayers of the village are on the hook for a total of $43,112 in state and federal penalties.
Even that amount would not seem as large if it didn’t come so soon after the Chatham Village Board doubled the water and sewer rates for the second time in two years after wildly underestimating the amount needed to meet the costs of providing water and sewer service.
All this makes for a good story except for one thing. So far, it lacks a villain. Yes, the job of managing village funds is a primary task of the mayor and the village trustees. But were they negligent, naive, clueless or misled?
Last year one member of the board, Trustee Jay Rippel, questioned village finances and alerted the Office of the State Comptroller about his concerns. The comptroller’s review of village records unearthed the problems… at least the ones we already know about.
The village had an accounting firm. Did the firm fail to notice that the taxes had gone unpaid for so long? Did the previous treasurer know about the hoarded tax funds? And how could the board state that lingering “discrepancies” were a few hundred bucks when the real amount was tens of thousands of dollars?
This is not a guessing game. The taxpayers of Chatham deserve to know exactly how this happened and how to prevent it from happening again. More assurances from Village Board members that they have reformed the ways they handle village funds won’t do.
Straightening out this mess requires an audit by the Office of the Comptroller for the years 2015 to 2018. It could be a lengthy process because who knows whether more funds are squirreled away in missing money accounts or under mattresses at Tracy Memorial Village Hall.
The Village Board probably can’t afford a thorough forensic audit by an independent private firm. But the board and individual taxpayers can and should request such an audit from the comptroller’s office as soon as possible. And they should seek support for the audit from state Senator Daphne Jordan (R-43rd), Assemblyman Jake Ashby (R-107th) and Assemblymember Didi Barrett (D-106th).
There’s a village election on Tuesday, March 19–too soon for the comptroller to complete an audit of village finances. Voters won’t know with certainty how the money management of the village got so screwed up. It could be incompetence. It could even be criminal–though no facts so far suggest that. It might be good intentions derailed by bad luck.
Being village mayor or trustee doesn’t make you a villain. But it does make you responsible. This is no time for damage control. The board should concentrate instead on rebuilding public trust.