POWNAL — With release of a forensic audit of town accounts still not imminent, the Select Board last week defended Town Treasurer Ellen Strohmaier against accusations she improperly applied income from a second town position toward her retirement benefit earnings.
The board also accused former Select Board member Marlena Pellon of targeting Strohmaier and other town office officials in a stream of public records requests and other emails involving allegations they say have proven groundless.
And the board revealed this week that a letter was sent earlier this year to Pellon by the town attorney advising her to cease alleged “defamatory” comments about town staff members.
During a March 25 meeting, board member Michael Gardner read a lengthy statement he said laid out a timeline of multiple records requests from Pellon since 2019. He added that, while searching for documents she had requested, town officials uncovered possible misrepresentations or manipulation of town personnel policy status by Pellon in an apparent attempt to target the treasurer.
In an email to the Banner over the weekend, Pellon declined to comment.
“By the advice of my attorney I have no comment at this time,” she wrote.
Pellon has stated in emails to Select Board liaison Rebecca Dragon, who is designated to process public records requests, that her requests for documents related to personnel policies from fiscal years 2018 through 2021 have not been fulfilled, because she wasn’t given copies of authenticated and signed policy documents.
During the meeting Thursday, board members said they believe Pellon’s requests have been fulfilled.
Board members and Strohmaier also decried what they saw as a time-consuming effort to comply with multiple records requests from Pellon.
Strohmaier thanked the board for its support Thursday, saying “I’d like to thank this board, from my heart, for bringing this to light for the public to know. This has been a long road.”
She said she knew “that Marlena, the previous Select Board member, was after me; it was obvious.”
Strohmaier said both her parents were seriously ill at the time the questions arose, which she said prevented her from defending herself as she might have. She added that she has records and communications to and from the town’s accounting and assessing consultant, the New England Municipal Resource Center, that show she was in compliance on the retirement system question.
The Select Board also reiterated Thursday that NEMRC has advised the board that allowing a treasurer to also count income as delinquent tax collector toward retirement benefits was not uncommon among Vermont towns, where individuals often hold more than one office.
The timeline that Gardner laid out during the meeting indicated that Pellon had at one point convinced other board members that the personnel policy should prevent the income from a second town position from counting toward retirement benefits.
He also suggested that Pellon had misrepresented the actual town policy to the forensic auditors.
Gardner said town records and a comparison of copies of the town personnel policy in the possession of different town officials revealed discrepancies. The paperwork showed that “it appears the personnel policy was manipulated by someone,” he said following the March 25 meeting.
Board member Bob Jarvis said in an email following the meeting, “Nothing I will say here can’t be seen in the public records, and in the summary and timeline laid out in Thursday’s select board meeting. Ms. Pellon manufactured policy to deliberately place our treasurer and others out of compliance, and provided this fraudulent policy to our town attorney, the forensic auditor, and others.”
FORENSIC AUDIT
The Select Board’s statement came as a forensic audit report commissioned by the board for $49,000 in 2019 is still pending.
Dragon and board members have said that the audit report, prepared by Graham & Graham, of Springfield, was deemed incomplete by the board, and currently issues such as a final payment to the firm are being negotiated through the town’s attorney.
In a preliminary draft report to the town, presented during a public meeting in January 2020, Jeff Graham of the audit firm said they had found no actual fraud at that point.
However, the firm did find multiple accounting entry mistakes, he said, which might be attributed to insufficient routine checks and balances in town office practices.
Graham recommended changes to upgrade town office accounting systems, adding, “You have a system that doesn’t have a lot of methodology to it. There’s not one standard internal control policy that covers all of the transactions from the very start to the very finish including the financial audit.”
In order to research the entry errors and related issues further, the firm also requested additional $25,000 from the town to continue the audit.
Jarvis said during the meeting Thursday that the town thus far has paid Graham & Graham about $60,000 and had been invoiced for a total of about $65,000.
INTERNAL AUDITORS
The issues that led to the forensic audit were brought forth initially by the elected town auditors, primarily in reports to the Select Board.
Some board members later blamed the part-time auditors for precipitating an expensive audit that they said had not revealed fraud or misappropriation. The board placed an article on the March 2020 election ballot calling for elimination of the auditors — which are not required by state law — and for reliance instead on annual audits by a professional accounting firm, which is required.
The three internal auditor positions were eliminated in that 2020 town vote.
However, this year, a citizen petition has placed on the March 30 ballot a request to reinstate the part-time auditors as “an extra set of eyes” to review town accounting procedures on an ongoing basis between the annual professional audits.
Those favoring a return for the auditors contended that, even if no actual fraud was uncovered, the forensic audit did confirm multiple recording mistakes and highlighted long-rumored inadequacies in the town’s accounting practices — especially in terms of having more than one official sign off on entries or changes.
Those revelations in turn led the Select Board to contract this year for additional services from NEMRC and to purchase a comprehensive accounting software system that is expected to coordinate all town accounts and provide more transparency.
‘CLOUD OVER POWNAL’
Calling into the March 25 videoconference meeting, former town Treasurer Jim Kocsis said he was pleased to see that the board had addressed the accusations against Strohmaier, but he noted there were some 17 other points or accusations that were being considered by the forensic auditors.
“I would like to see this come to an end,” Kocsis told the board. “I would like to see a consensus [between the board and Graham & Graham] and get this ended.”
The board’s presentation saw “one point cleared up,” he said, “but I would like to see the rest of it come into the [board’s] meeting minutes so we can move forward.”
Until then, “there will be a cloud over Pownal, and I don’t want to see that,” Kocsis said.
Dragon said her intention is to post online all of the forensic audit information, but a formal agreement between the board and the auditing firm must come first.
“Until we have the legal piece of it finalized, there is nothing to share,” she said.
She reiterated during the meeting that NEMRC officials were shown the draft audit materials and they were of the opinion that “none of those findings [involved] fraud, waste, abuse or illegality and there was no misappropriation of funds.”
ALLEGED DISPARAGEMENT
Dragon also said after the meeting that she and other officials have felt disparaged by Pellon in emails sent to town officials and copied to others, to the point the board asked the town attorney, Robert Fisher, of Fisher & Fisher, of Brattleboro, to send a cease and desist notice to Pellon.
The letter, sent in January, indicates legal action could follow if alleged “defamatory statements toward town employees” continued.
Asked about the number of FOIA requests the town has received from Pellon, Dragon said that since June 2020 there were about 16 records requests, about half related to the treasurer or delinquent tax collector positions Strohmaier holds.
There also were “other communications from [Pellon] accusing the treasurer of criminality,” Dragon said, and communications or social media posts making accusations against her as well.
Gardner, speaking after the meeting, said the emails from Pellon to the town “just never end."
He added that what the board sees as evidence of attempts to manipulate the personnel policy or the impressions of auditors or others “was nothing we went looking for; it just jumped out. It’s right there [in his statement]. The people can make their own conclusions.”
The statement is expected to be posted on the town’s website.
Board member Harry “Jamie” Percey said this week that he also agrees with the assessment of the situation as described by Gardner Thursday.
He said in an email, “I stand behind the letter that Mike Gardner read at the meeting on the FOIAs and policy clarification on the amendments to the policy, where the past board was duped in being told that there were no changes from the one we all had agreed on.”
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