ELLSWORTH, Maine — The head of the Office of the State Auditor thinks Hancock County commissioners may have broken the law several years ago when they reduced the time commitment for the county treasurer and created a financial administrator position to help pick up the slack.
But so far, no law enforcement officials have said they agree with her position.
State Auditor Pola Buckley last month sent a letter to Percy “Joe” Brown, chairman of the Hancock County commissioners, indicating she has been in touch with law enforcement officials about the findings of an audit her office conducted of Hancock County.
This week, Buckley said she is concerned Hancock County may have violated the law when it decided in 2008 to create a chief financial officer position and cut the pay of the county’s elected treasurer position to reflect the reduced time commitment.
Buckley acknowledged she is not a lawyer but in her office’s 14-page audit report said that the staffing change contradicts the will of Hancock County voters, who in 2005 rejected a proposal to change the county treasurer’s seat from an elected position to an appointed one.
“It appears to me that something that could be illegal occurred,” she said. “It doesn’t appear to be appropriate that this could happen in a democracy. The voters said ‘no’ and it was done anyway.”
Some Hancock County officials have expressed bewilderment about Buckley’s report. They said they have honored voters’ wishes by keeping the treasurer as an elected position and instead did what many other counties in Maine have done. They hired a trained financial professional to handle the county’s day-to-day financial business and retained an elected treasurer to fulfill that position’s statutory requirements of receiving and accounting for revenue, paying and accounting for bills, and making sure there is an external independent audit of the county’s finances each year.
“I’m not sure what they are talking about,” Brown said Monday about Buckley’s reference to alerting law enforcement, adding that everything cited by Buckley in the audit was done under the advice of the county’s attorneys. “It’s a mystery to me.”
Brown said the treasurer’s statutory duties have not been transferred to the CFO and that nothing about the arrangement prevents the treasurer, Janice Eldridge, from fulfilling those duties. The county reduced the pay for the treasurer’s position from around $47,000 in 2008 to $10,000 the next year and then to $5,000 the year after that, according to Brown, but those reductions were made before Eldridge first was elected to the job in November 2010.
Brown said that despite what Eldridge is paid, there is no limit on the number of hours she or any other elected official can put in at his or her job. The only authority commissioners have over other elected officials, he said, is on budgetary matters. Hancock County’s total budget for 2015 is $7.4 million.
Brown added that the county has been developing a plan to reorganize its office of financial affairs since last year, when it decided to create and fill a new county administrator position. Gene Conlogue, whom the county hired in January to fill that post, is overseeing that effort.
Contacted at home Wednesday, Eldridge said she has been voicing concerns to commissioners about the division of labor between her and the county’s CFO, Phil Roy, for years. She said the commissioners’ expectation is that she will spend only about five hours a week fulfilling her duties as treasurer, but that five hours simply is not enough.
Eldridge, who also works as a legal secretary for an Ellsworth law firm, said she has not been keeping up with the statutory requirements of her position as treasurer, such as submitting periodic financial reports to the commissioners or receiving checks and bills. She said she rubber-stamps checks paid out by the county and, though she has asked for additional financial management training and a greater role in the office, those requests have been denied.
“Five hours a week doesn’t give you much time to do anything,” Eldridge said. “My position has been very minor.”
In the past, Eldridge has feuded with Roy over how he has managed the county’s money and over access to filing cabinets that contain the county’s paper financial records.
Antonio Blasi, one of Hancock County’s three elected commissioners, said Wednesday that he agrees with Buckley’s findings. Since before he first was elected commissioner in 2012, he said he has felt that the county’s financial affairs office should be run by an elected treasurer, not by an appointed department head.
Blasi said commissioners just this week voted to dispose of a previously approved finance department organizational flow chart that indicated the treasurer reports to the CFO. Aside from this measure, he added, the county has not done anything to address Buckley’s concerns.
“Nothing else was done,” Blasi said.
According to Rosemary Kulow, executive director of the Maine County Commissioners Association, many other counties in Maine have similar arrangements when it comes to staffing their financial offices. Aroostook, Kennebec, Oxford, Piscataquis, Penobscot and Sagadahoc counties all have elected treasurers who earn the equivalent of part-time salaries and full-time financial administrators with various titles such as chief financial officer, finance director or financial analyst. Other counties, including Cumberland and Knox, have done away with elected treasurers with voter approval and now have their financial affairs overseen by full-time, professionally trained administrators.
Kulow said she had not seen the state auditor’s report on Hancock County but, given that many counties have similar arrangements, she finds it “a little surprising” that Buckley has raised legal concerns about Hancock County’s situation. She declined further comment.
When asked Tuesday about other counties, Buckley said Hancock County is the only one whose organizational structure her office has looked into. She said having an effective internal control system with proper segregation of duties is essential for good government bookkeeping practices and that Hancock County’s organization falls short of that.
“I can’t comment on what other counties are doing,” she said.
Buckley, who said her office does not have any law enforcement capability, declined to say which law enforcement agencies she has contacted or whether any of them might be investigating the county.
Timothy Feeley, spokesman for the state attorney general, said Tuesday that the agency is aware of the situation.
“We are reviewing the auditor’s report, however we have no further comment,” Feeley indicated in an email.
Conlogue said Wednesday that he is not losing any sleep over the state auditor’s report. He said the auditor has no authority to determine how the county’s financial office should be organized.
“It’s not the purview of the state auditor to determine if the county can have a CFO,” Conlogue said.
According to Buckley, her office looked into the matter after it received of copy of Hancock County’s 2012 independent audit, which indicated that the county had a deficit of $26,273 in its Unorganized Territory tax increment financing account. The TIF account was set up as part of financial agreements the county reached with First Wind when the developer — now known as SunEdison — built a 19-turbine wind farm in Township 16.
The county spent the money on emergency radio communications upgrades before it had received its first TIF payment from First Wind, which Buckley said was improper. But Conlogue said the TIF agreement already had been approved by the state Department of Economic and Community Development and that there was nothing improper about temporarily incurring the deficit in the account, which he said was repaid when the county received its first TIF payment from the developer.
Buckley said she has no concerns that the law was violated when the county incurred the deficit in the TIF account.
Disagreements among Hancock County officials over the scope and authority of the CFO position have flared into public view several times over the past few years and have attracted the attention of municipal officials.
In 2012, several current and former county officials took out an advertisement in a local weekly newspaper urging voters not to cast their ballots for any of the incumbent commissioners because of “a series of improprieties in the county’s financial office.”
In June 2011, the manager of the county airport filed a complaint with commissioners over Roy’s management of airport funds. The commissioners later dismissed the airport manager’s complaint after the Federal Aviation Administration, which sets rules for how airports that receive federal funding can manage their money, told the county to use better bookkeeping practices but determined the funds had not been used improperly.
