CRANFORD — Last week Cranford took the first step to getting back on sound financial operational footing by hiring an assistant certified financial officer and account clerk.
The township committee appointed Lavona Patterson, the former assistant treasurer in Montclair, as the new assistant chief financial officer along with an account clerk that was unnamed.
Late last week Township Administrator Joe Hartnett said he was confident Patterson had the both the credentials and experience to hit the ground running. Over time, he added, this new team will be able to provide the stability to straighten out this department that floundered operationally the last several years.
Although township officials could have moved Patterson immediately into the CFO position, Hartnett said they are taking things slowly by phasing in the new employee. This way, he added, Patterson will have time to learn how things are done in Cranford while Government Strategy Group, the consultant brought aboard in March to handle day to day operations, remains on board.
Patterson, who has been working nights and weekends to help the township for several months, will be named the deputy chief finance officer in a year, eventually will become the township’s CFO, the township administrator said. Hartnett also pointed out that Patterson recently passed all the tests required at Rutgers to hold the CFO title and is ready to do the job.
Critical to this process will be phasing out financial consultant Government Strategy Group, which costs the township $130,000 annually. However, the consulting firm will continue to assist the township until Patterson is completely comfortable at the helm.
“By next year we will start to see the results of phasing out our financial consulting firm,” the administrator said, noting that as a result in 2014 the township will save $26,340. The following year $65,000 and finally eliminate the entire $130,000.
The owners and operators of Government Strategy Group, Ken DeRoberts and Ron Angelo, came under fire a few years ago for their alleged separate involvement in incidents that took place in the towns where they were CFO.
According to information obtained by LocalSource, in 2010, Angelo, Summit’s former CFO, submitted his retirement after it was discovered that Ameripay, which handled the city’s payroll, had defrauded the municipality and others.
The payroll company mishandled the payroll by not withholding taxes to the IRS for Summit and many of its other clients. Although the Summit council defended Angelo’s role in the incident, and he was not involved in the scheme in any way, residents and the local taxpayer’s association did not agree.
They demanded Angelo’s retirement saying he should have realized $1.3 million had not been deducted from employee’s pay since he was the CFO.
In 2006, New Providence residents and members of the Democratic party called on the mayor and council to place DeRoberts, the borough CFO, on unpaid leave because of a criminal investigation into whether he was provided an annual salaried position, without competitive bidding. The investigation centered on DeRoberts being paid to reconcile the board of education books while a borough employee actually did the work.
However, DeRoberts is still the borough’s CFO and no charges were ever levied.
Neither Mayor Tom Hannen nor Hartnett discussed this particular issue, but were willing to talk about what had to change in order for this department to function smoothly.
“The good news here is that the township is on fundamentally solid financial footing, but operationally things have deteriorated,” Hartnett added.
Because there was poor record keeping after former finance officer Tom Grady retired more than three years ago, and financial controls and procedures were not followed by multiple finance people that stepped into the role, this department began to suffer.
Hannen said even Clark offered their help, sending their finance officer over on a part-time basis to try and straighten things out but eventually he had to return to his full-time job.
With the finance department on shaky ground, this put considerable strain on the township because when a finance department does not work smoothly, everything is affected. Bills do not get paid, insurance and other important payments are late or not paid at all.
Fixing this, though, takes an incredible amount of time, in addition to keeping up with all the day-to-day financial burdens of a busy municipality.
Hannen said things came to a head recently when the township had to ask for help from the county in order to get payroll out.
“We were down to one person in the finance department so I called Freeholder B.J. Kowalski, a Cranford resident, to see if there was any help the county could give us so we could get our payroll out on time,” the mayor said Friday, adding that they sent someone within hours to lend a hand.
Hannen, however, said he and the governing body are breathing easier now that Patterson is on board.
“I expect our new assistant CFO will get us down the road and make us more efficient so overall expenses are less costly,” the mayor said. “This is just another step in our plan to make our $34.2 million operation run smoothly and in a business like fashion.”
Hartnett said that although it will take time “our goal is to get an even better financial rating than we have now.”
“We also want to upgrade technology in this department so things are online with today’s standards,” Hartnett said, but added the township is taking one step at a time.
For 25 years Grady managed to keep the township’s coffers in order. While his method of handling the books, managing payroll and juggling money may have been outdated or even not in keeping with how most municipalities handle finances, things ran smoothly according to employees and former governing body members.
In fact, each year when the town audit was completed, the only recommendations made were regarding a handful of minor procedures to make things run more smoothly. That is not the case now.
Cranford’s audit last year had nine pages of recommendations on how Cranford’s finance department had to improve or had lagged. Many had to do with such serious issues as pensions, health insurance, payment of bills, and payroll deductions.
Hannen was shocked by this and made a commitment that it would not continue.