Town Auditors Still Trying To Track Down $1.5 Million In Park Fees

Southampton Town officials discovered last week that nearly $1.5 million in park fees, money that the municipality collected with subdivision applications, was not placed in the right account over several years, according to Town Comptroller Tamara Wright.

Ms. Wright stressed that the money in question is not missing. Rather, she said, the fees collected by the town were never placed in an appropriate restricted fund dedicated to the park fees; instead, the money appears to have been assigned to other accounts by mistake.

“We don’t have any reason to believe that any of it is missing,” Ms. Wright said of the $1.5 million. “The key is to find where it ended up so we can move it.”

The account is funded by developers who pay fees on their subdivision applications once they secure Town Planning Board approval. That money is then used to maintain the municipality’s parks and recreational facilities. The idea behind the collected park fees, according to Ms. Wright, is for the town to reinvest that money by creating new parks and recreational facilities near the new subdivisions. The money that is collected can be used only for that purpose.

On Monday, Ms. Wright said the transactions in question occurred sometime between 2003 and 2008, though she couldn’t be more specific.

In an e-mail sent on Tuesday afternoon, Ms. Wright would not say how much money is now remaining in the parks fund, stating that the balances are inaccurate and are currently being studied by the town’s internal auditors, Nawrocki Smith, LLP. She added that the auditors will report an accurate fund balance to the Town Board on Friday.

Ms. Wright said the town’s auditors recently learned that approximately $775,000 of the $1.5 million had been mislabeled as “Planning Board fees” within the town’s Land Management Enterprise Fund. She said she has no doubt that the rest of the missing money, about $725,000, would be located.

The comptroller said the town’s auditors are still working on the problem, and that the matter will be discussed again at the Town Board work session scheduled for this Friday, November 12.

The issue was raised during a Town Board work session last Thursday, November 4, by Ms. Wright, who used it to preface a larger discussion about the town’s various fund balances—some of which are not in compliance with their fund balance policies. Essentially, individual fund balance policies dictate what percentage of funds can be spent and how much should be kept in reserve.

Ms. Wright said that, hypothetically, the Town Board could cover the $1.5 million shortfall by tapping the town’s Land Management Enterprise Fund balance, which now has about $2.7 million. On Monday, the town comptroller said that such a move could reduce the $950,000 that Town Supervisor Anna Throne-Holst has included in her proposed $82.1 million preliminary 2011 budget to help stabilize taxes in the Land Management tax district next year.

While relieved to learn that the funds are not missing, Town Board member Jim Malone said this week that he’s frustrated that the auditors have discovered another accounting error at Town Hall. He also shared Ms. Wright’s concern that the error could reduce the amount of money now set aside to provide tax relief.

“That’s the frustrating part,” Mr. Malone said. “We are basing our decisions on where we spend in certain sectors, and how we tax overall in certain sectors, on those fund balances, and it’s very difficult to make those decisions if these fund balances numbers are flying around.”