Montville — A memo from the Water Pollution Control Authority provides clarity on commissioners' thinking regarding a private audit.

The memo, an annotated version of private auditor PKF O'Connor Davies' list of recommendations on how to protect against questionable WPCA spending, sheds light on the individual views of Commissioners Brian Quinn, Shawn Jinkerson and Tony Siragusa, commission Chairman Chuck Longton and WPCA Superintendent Derek Albertson. It includes input from WPCA officials on each recommendation and has the most specific details to date on how the WPCA plans to ensure ethical business practices going forward.

An audit last summer identified almost $30,000 in questionable spending by WPCA personnel between 2014 and 2018. That included credit card expenditures of almost $13,000 at Mohegan Sun's Tuscany, Bobby Flay's Bar Americain, Chili's and other restaurants without "documentation on who was present or the purpose of the expense," along with additional unexplained purchases. The findings prompted an ongoing state police investigation.

Audit recommendations included stricter financial oversight at the WPCA, new policies to prevent fraud, a code of ethics and more straightforward expense reports, among others. After the findings were released, the authority planned to "hammer out the new policies in coming months."

After delays and deliberations at multiple meetings, the WPCA is poised to codify the numerous policy changes during its March meeting.

The memo illustrates a divide between commissioners on the issues.

On one side, Jinkerson and Siragusa advocate for implementing most of the recommendations. On the other, Longton and Albertson sometimes push back on recommendations and explain how the WPCA currently does business, although both agree with some of the audit's suggested changes.

Quinn put forth an overarching thought he applied to all the recommendations: "Anything in here that doesn't relate to non-operational expenses should be left up to the superintendent and the mayor," he wrote. "We aren't managers, we're volunteers."

Quinn and Jinkerson suggested one major change at February's meeting: that all non-operational expenses exceeding $200 and not covered by union contract require prior authority approval. The authority tabled action on the recommendation until next month's meeting. Mayor Ron McDaniel suggested commissioners take a month to digest the memo, as well.

Existing practices

Albertson and Longton argued that much of the requested oversight is already in effect. They wrote that controls currently are in place for the credit card, a major point of contention in the audit.

"We recommend that all credit card charges be supported by receipts that include the details of the purchase," the auditor wrote. "For any restaurant and food charges, the documentation should include the details of the purchase and not just the credit card copy."

Longton wrote that the use of the credit card must be preauthorized and all credit card purchases be completely documented. The credit card is not carried around by an employee but kept "under lock and key" in the superintendent's office. If an employee needs it, the employee must sign it out and come back with a detailed receipt.

Albertson wrote that all invoices are approved by the superintendent after confirmation of receipt of goods and services, in line with an audit recommendation. He wrote that he is working with the authority accountant, Maureen Benway, on creating a standard employee reimbursement form, another recommendation, and also is working on making sure charges are assigned to specific accounts.

"We noted that the majority of the credit card charges at restaurants were charged to miscellaneous expense," the auditor wrote. "We recommend that disbursements be charged to the proper expense account (not just miscellaneous)."

The auditor pointed out that certain items ordered online were shipped to an employee's home address. "We recommend all purchases be shipped to WPCA offices," the auditor wrote.

Albertson wrote in response that that practice already had been discontinued.

Per an audit recommendation, communication of financial status reports is being provided to the WPCA Commission and superintendent monthly, according to Albertson and Longton.

However, although numerous practices are already in effect or being developed, they've yet to be codified.

Policy disagreements

Jinkerson felt there was no need for a formal policy defining when it's allowable for the WPCA to pay for restaurant charges because "it should not be allowed, period." Siragusa agreed. Albertson said that while there are no restaurant purchases currently, "In the future, the superintendent will control these transactions and, if they occur, then appropriate documentation will be applied."

Albertson and Longton supported reimbursing the accountant for cellphone service at a rate of $360 biannually, because that employee now is considered essential. "The biannual stipend is consistent with the same practice provided to the workforce, who can be called out 24/7," Longton wrote.

But Siragusa and Jinkerson thought otherwise. "There is no reason that the (WPCA) accountant needs to be contacted outside of normal working hours," Jinkerson wrote.

While the four men agreed with the auditor's recommendation that all reimbursed travel expenses need "adequate supporting documentation," Jinkerson and Siragusa thought there was no need to purchase travel insurance, whereas Longton and Albertson thought the insurance should be purchased for air travel, such as when two WPCA employees went to Auburn, Ala., for a conference.

The private auditor found a "lack of segregation of duties and lack of monitoring of the WPCA operation is considered to be a material weakness in internal controls," but Albertson wrote that the town audit "did not consider the issue of segregation of duties to be either material or significant."

Longton disagreed with the audit's recommendation for the town finance director to have access to the WPCA's general ledger, writing that the town's "finance director has no business monitoring the general ledger of a private business." The role of the town government in overseeing the WPCA continues to be disputed — Jinkerson, for example, flatly agreed with the recommendation.

The auditor noted that the WPCA has three bank accounts at three different banks and a Short-Term Investment Fund investment account. The audit recommended that these accounts be consolidated and the STIF account be managed by the town treasurer.

Siragusa asked for an explanation of the STIF account, and Jinkerson asked why the WPCA has multiple accounts. Longton wrote that tax revenue is public money, but the WPCA is funded by private money collected directly from ratepayers for goods and services provided. "It is business income. It is illegal to mix public and private funds," he wrote.

The WPCA facilities are owned and operated by the town. With the exception of the superintendent, the mayor negotiates the union contract for workers at the facilities.

Officials mostly agreed on two main points: that the WPCA adopt a formal ethics code, and that the practice of buying lunch for vendors be immediately discontinued.

s.spinella@theday.com