ROCKPORT — An accounting error has caused an approximate $490,000 shortfall in the town of Rockport's budget for the remainder of the fiscal year.
The mistake was made by CliftonLarsonAllen LLP through its Greater Boston offices in Lexington, according to interim Town Administrator Mitchell Vieira. The firm has provided town accountant-level services for Rockport for the past two years.
During the last week of October, Finance Committee Chairman Bill Wagner compared the town's tax recap summary with the committee's budget projections and Proposition 2 1/2 levy limit.
"There was a significant gap in what we were collecting and what we could be collecting," he said, adding that "Rockport tries to run close to our levy limit."
Wagner brought these discrepancies to the attention of CLA.
"The Finance Committee kept going back and forth with the firm, saying 'There's something wrong with the work,'" said Selectwoman Denise Donnelly. "Sure enough, there was."
Turns out, a consultant working on the recapitulation document for some of the town's finance work failed to factor in the indirect costs – including health insurance premiums, pension contributions and debt service, Vieira said – between the general funds and water and sewer enterprise funds.
The apparent mistake led to Rockport residents being under-taxed for fiscal 2019, which began July 1. The town's operating budget is $29.5 million.
After the mistake was found, the consultant was immediately removed from the case, Vieira said. Currently, the town is in the process of severing their relationship with CLA Greater Boston and searching for a new firm to handle town accountant-level services.
Representatives from CLA Greater Boston declined to return phone messages left Friday seeking comment.
Vieira said he has devised a plan to make up for the shortfall on revenue. As of now, there is a freeze on all non-urgent spending and hires, and Vieira will be closely monitoring all town expenditures through June 2019, when the fiscal year ends.
"We feel confident we will be able to address the shortfall through these methods through the end of the fiscal year," said Veira, who described the incident as a "one-time error."
The town cannot force the school system to abide by these measures, but Vieira said school officials were willing to follow them to the best of their ability. He described Rockport Superintendent Rob Liebow as a "team player."
There is no way to get the approximate $490,000 back in the town's budget, Vieira said. According to state law, there is no changing a fiscal year's tax rate once the tax bills have been mailed.
However, Vieira said he is confident there will be no shortcomings with future tax recapitulations.
Michael Cronin may be contacted at 978-675-2708, or email@example.com.