A new finance expert’s consulting agreement was approved by City Council Thursday and it is already paying dividends, officials said.
Tracey Rash, who is with Government Finance Solutions, Harrisburg, will be working on behalf of the city for the next 120 days or when her services reach an $85,000 cap.
Besides finding out that the city owed the Internal Revenue Service $160,000 in a civil penalty for unreturned 2017 tax papers, Rash told the finance committee and council that she has recovered $15,000 in unclaimed money being held by the state, and she is anticipating receiving $40,000 more due the city.
Additionally, she determined that financial reports generated by the city’s system have not been reconciled since 2019. Nor had bank accounts and she was trying to get them reconciled but until they are figures may not be accurate, she warned.
She continues to meet with department heads and is working on corrective action regarding Federal Emergency Management Agency grants for smoke alarms and a US Department of Justice grant for protective gear during the COVID pandemic.
At the end of June, Joseph Pawlak, interim finance director, was let go.
Rash was brought in because of her experience, including 32 years of auditing services.
Her job remains to help get the city’s finances in order and then let somebody else come in to take it from there, Mayor Derek Slaughter said to the finance committee this week.
Councilwoman Liz Miele said she was glad to see such reconciliation of accounts and accurate figures as the city prepares its budget discussion in November.
Part of Rash’s work has been working with the new River Valley Transit Authority and as the city continues to separate finances to ensure money in the authority is accurate.
Her one month bill was $13,382.
With respect to the Bureau of Fire, there are several federal grants that are over a year behind reporting.
“I was working with the chief to get the information together to be able to report on those federal grants,” Rash said.
“In regards to that, I spoke with Federal Emergency Management Agency (FEMA), who is one of your grantees, and when I was on the phone with her, she told me that you had been chosen for a monitoring so FEMA comes out and checks. . . and there was no response from the city so those things are still outstanding,” she said.
There are limited bank reconciliations done since Dec. 31, 2019, “so the information in your system is not accurate so I gave them historical data but it’s only as good as what’s in this system right now, so we will be working towards getting budgets together and I’ve also attended the pension board meeting for the fire department,” Rash said.
In terms of finances, Rash filed the quarterly taxes for the second quarter, “and in digging through piles of paper that were left in the finance department, I found an Internal Revenue Service notice for the 4th quarter of 2021,” she said.
“In contacting the IRS, I was told you actually had three issues outstanding — the largest one being that you have a notice from 2017 that you did not file certain documents with the IRS and that they had sent you multiple notices, none of which were responded to and that you’re now in civil penalty phase which means that the likelihood of getting those penalties abated is next to nothing,” Rash said.
Rash asked the IRS to send her a transcript of the documentation so that she can write an abatement letter and try on the city’s behalf to get that penalty of $160,000 abated.
Two issues were resolved with the IRS on those calls.
Rash also found that “you had money in what’s called Pennsylvania unclaimed funds so I went on to the unclaimed funds website. I drew down your money from those entities,” she said.
“I’ve been answering questions for department heads and vendors, digging through multiple piles of envelopes that are opened and unopened and invoices that are sitting around,” she said.
Rash filed numerous documents, met with RVTA regarding their cash reconciliations, met with human resources and multiple individuals regarding pension, military buyback and drop pension calculations.
She noted the city’s 2017 audit was not complete. She is meeting with several individuals remotely regarding cash management and working with M&T Bank to get all city accounts transitioned into the appropriate names.
“I’ve also been working on putting together a procurement policy for more policy for the city and I’ve met with software vendors for your accounting system because it is significantly outdated,” she said.
Multiple reports are unavailable to the city in the current system, so Rash has been providing some feedback on those accounting systems.
Yet to be done are the pension calculations and the military buyback calculations and the drop calculations.
Rash is reviewing prior audits, completing the budget worksheets for the non-general fund funds and then continuing to dig through the piles of paper that remain in finance.