Town releases unredacted minutes related to employee misuse of Town credit card

by beth on February 4, 2021

As I previously shared, a resident has been seeking information on the Town’s handling of an alleged theft by a Southborough Recreation employee in 2019. More details are now available to the public.

In past responses to records requests, the Town released minutes from Executive Sessions and other documents that were almost entirely redacted. Based on directives from the Mass Public Records office that the information shouldn’t be shielded, the Town released a batch of requested unredacted documents in December. Tuesday night in an Executive Session, the Board of Selectmen voted on releasing the minutes. They were posted yesterday afternoon.

Here are highlights from what the minutes reveal about the BOS Executive Sessions in spring 2019.

[Editor’s Note: It’s worth noting that the majority of Recreation staff and selectmen have left since the meetings took place.*]

The April 25, 2019 Executive Session focused on the discovery of alleged improper used of a town issued credit card by the Program Coordinator for the Recreation Department. Prior to the meeting, the employee confessed to the improper use and submitted a check to reimburse the funds.

Minutes show that the Board of Selectmen learned that the reimbursement check was submitted before the Town Accountant could could ascertain the total was correct. The amount was based on a total assessed by the Recreation Director. Selectman Bonnie Phaneuf opined that a department head doing the analysis was flawed and asked for an internal audit of the department.

Selectman Brian Shifrin (who previously served as Chair of the Recreation Commission) proposed considering accepting the employee’s resignation through a separation agreement, which Special Counsel noted would mean a release from further litigation.

Selectman Dan Kolenda moved not to accept the resignation and instead place the employee on administrative leave and schedule a termination hearing. The vote was 4-1 with only Shifrin opposing.

Selectman Lisa Braccio advocated for an audit to ensure all bases are covered and the matter doesn’t extend any further to additional town employees. The Board’s consensus was for an audit focused on Recreation but identifies other problematic areas with a broad brush. (The July 2019 audit report was shared by the Town last November.) Selectmen authorized spending $10,000 on the audit.

The minutes indicate that the Town was still on the hook for the employee’s pension for her years of service:

After inquiring, the Board was informed [by Special Labor Counsel Attorney Tim Norris] her pension would not be affected; only a court decision could put a lien on her pension.

The board held a termination hearing in Executive Session on May 7, 2019. The employee and her attorney refused to attend. Her attorney disputed the need for the meeting, stating the employee had resigned and given notice to her supervisor.

The board voted 4-0 to terminate her. (Shifrin was absent from the meeting.) There was reference to the employee having made out a check for $70 more dollars in charges that were in the latest billing.

The board asked how the employee was aware of the amount since her Director was asked not to communicate with her. The Board directed Town Administrator Mark Purple to have the IT Manager retrieve “any emails that might have been sent on the subject”.

The Board’s minutes state:

The fact that the [Program Coordinator] is no longer a town employee is a matter of public record, but her termination letter is not a public record. There should also be a directive to staff clarifying the fact that information should not be shared.

As I previously posted, the Police Report (written on April 26th and modified on April 29th) states: 

On April 26, 20191 was able to confer with Worcester County Assistant District Attorney Michael Luzzo regarding the matter. Due solely to the fact that the Town of Southborough has already accepted partial restitution from [the employee], the case can not be tried criminally. ADA Luzzo confirmed that the case would have to be litigated civilly in order to recoup any further lost funds.

BOS Chair Marty Healey publicly criticized the prosecutor’s decision this fall.

The May session minutes reference the police report but make no mention of the lack of criminal prosecution. There was also no discussion recorded about potential civil litigation.

The public records requests behind the releasing of documents were filed by resident Jack Barron.

*The 2019 events occurred prior to the hiring of the current Recreation Director and Program Coordinator. (Then-Director Doreen Ferguson was already scheduled to retire that June.)

Since the incident, there has been significant turnover on the Board of Selectmen as well. Only Lisa Braccio and Brian Shea are still members. Prior to the incident, Phaneuf and Shifrin opted not to run for reelection. (Shifrin passed away in November of that year after a battle with ALS.) Healey and Sam Stivers were elected to their seats on May 14, 2019. Kolenda chose not to run for reelection in 2020 and was replaced by Chelsea Malinowski last June.

{ 8 comments… read them below or add one }

1 where? February 4, 2021 at 12:40 PM

And a link to the unredacted document is where in your story above?

How much money was reimbursed?

How does that compare to the $10,000 of taxpayer money spent on an audit?

And, thank you Marty Healy for your criticism of the Worcester County ADA – 2 years after the fact. A day late and a dollar short?

Chairman Healy, what is going on with the PILOT payments from Fay and St. Marks schools? You dodged the questions at the Annual Town Meeting last summer. How about an update?

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2 beth February 4, 2021 at 1:05 PM

I linked the documents to my references of the Executive Session dates. You can also find them under minutes on the Town website. The reimbursement amount was $844 with another $70 offered (mentioned during the May 7th meeting) that I’m unclear as to whether or not the Town ultimately accepted.

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3 Al Hamilton February 5, 2021 at 8:53 AM

I was wondering the same thing about the PILOT discussions. I think that the ATM would be an excellent forum for the BOS to update us on the progress or lack thereof. I would respectfully suggest that the BOS provide a report on the subject.

I think that the voters will want to consider if they should dust off the articles that were postponed asking for special legislation re the schools.

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4 where? February 4, 2021 at 4:19 PM

Yikes!

So, $10,000 of taxpayer money spent to ensure “all” of the less than $1000 inappropriately spent money was refunded?

Another “wise” investment. Any chance the auditor was a friend or relative of a BOS member at the time?

Sounds like we need another audit!

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5 Embezzlement from the Town February 4, 2021 at 6:01 PM

Beth, can you tag / link articles on this embezzlement matter and perhaps the prior incident of embezzlement from the Town ($400k)? These articles involving the Recreation Department embezzlement are not tagged, making it a bit difficult to follow along. Thank you

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6 beth February 5, 2021 at 8:49 AM
7 Tina Hyland February 5, 2021 at 10:14 AM

I am truly confused. In the private sector the employee would be fired, and once the money was reimburse it would be the end of the discussion. Meanwhile the treasurer would tighten the use of credit cards. This seems to be much ado about nothing that has led to the town paying 10,000. This is truly absurd and I do not understand why people continue to be obsessed about this. There are important issues happening in this town, Covid, Park Central, lack of payments from private schools, etc.

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8 Embezzlement from the Town February 7, 2021 at 12:15 AM

Tina, this is the second time public monies have allegedly been stolen, as the first incident involved roughly $400,000!! Now comes an audit that reveals (finally) what the problems are systemically: no proper internal controls. No matter the amount, large or small, there should be proper controls and an accountability for every dollar. Most importantly, how is this prevented from happening again? The auditors report is warning it could happen with no proper internal controls. See the link above to read the auditors report, which is well worth the small money spent for what it reveals. And kudos to those who ordered it. Not only are there “no proper internal controls” but there have been changes to the way invoices get approved in the Recreation Department, unlike other departments, per the report. Also, the report warns of improper build up and spending of reserve funds on capital items, bypassing Town Meeting floor and taxpayer approval via the normal budgetary process.

More importantly, there are accountability shortfalls throughout town hall per the report. Wow and wow. Every taxpayer should carefully read that auditors report. Fully agree there are many important things happening, and lack of proper financial controls and a lack of appropriate policies is rightfully concerning and right up there with other matters. Why wasn’t corrective accounting action and good preventive policies put in place immediately? Could this happen again?

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