The Board of Trustees of the New Rochelle Public Library issued a public statement today on their 7-month long investigation into Accounting Discrepancies first reported by Talk of the Sound last June.
After an investigation of the library’s financial records and those maintained by the City School District Treasurer, the New Rochelle Public Library Board of Trustees has determined that the apparent accounting discrepancy that was brought to the attention of the Board in June 2011 was due to an inconsistency in the designation and reporting of “restricted funds” versus “assigned funds” in the library’s Fund Balance. The cash shortfall was primarily solved by transferring funds owed by the Capital Fund to the General Fund in July 2011.
To prevent future accounting discrepancies the Board has taken the following measures:
- Reorganized internal staff to incorporate the internal controls necessary to prevent such a problem in the future (see link to Anthony Maraglino story below).
- Designated board members with professional financial and accounting experience to oversee the budget process.
- Engaged with the School District Treasurer, to ensure better communication and coordination.
When the financial discrepancy was first discovered in June, the Board of Trustees also took measures to reduce the library’s 2011-2012 Budget to prepare for any possible deficits. This action and due diligence in cost-effective library operations has resulted in fiscal abilities to safeguard for any future shortfalls, including those created by the annual calendar lapse in the Temporary Anticipation Note (TAN) funding.
This statement differs from the original belief of the board that there had been cumulative accounting irregularities. In a statement issued in June, 2011, the NRPL Board stated:
Our research suggests that accounting irregularities leading to the misstatement of our fund balance were likely occurring over a number years resulting in an over-reporting of the existing cash balance in the range of $300,000.
The genesis for the confusion is that the New Rochelle Public Library relies on the City School District of New Rochelle for treasury services and audited financials. No money was ever missing and the only "error" was in library staff and trustees not fully understanding how the school district accounts for the library balance sheet in its financials.
The board has added two members over the past year, Bo Kemp and Bernardo Nunez, that have strong backgrounds in financial accounting.
EDITOR'S NOTE: The New Rochelle Public Library has been not just forthcoming and transparent in identifying and resolving the accounting issues but proactive in keeping the public informed along the way. Their commitment to open government principles stands in stark contrast to the disgraceful conduct of the New Rochelle Board of Education which is this very weekend holed up in secret meetings at an "undisclosed location" where they are illegally discussing the school budget, tax increases and other public business that is required to be discussed only within the context of a public meeting.