Freeport auditors call it quits after missing state deadline

Freeport has another overdue audit and, right now, no one willing to complete it.

Council this week accepted the resignations of the borough’s three auditors, who bristled at a push to give the books greater scrutiny. Audits were due to the Pennsylvania Department of Community and Economic Development on April 1.

Elected auditors Jeffery and Sophia Lowers submitted a joint letter of resignation May 2, citing the need for a professional auditor, followed by James Swartz Jr. on Monday.

Until last year, the Lowers family held all three spots on the board of auditors, when Tina Lowers’ term expired. Council appointed Swartz, a former mayor and councilman, in January to replace her.

His resignation letter indicated he wasn’t up to the task.

“After reviewing 40-some pages of guidelines and attending one meeting, I feel it consists of more than just signing your name to a document saying an audit was done properly,” Swartz said in his letter. “I would encourage each council member to read the guidelines and see what an audit entails.”

The borough has experienced turnover among its elected officials and professional staff as of late, shaking up longstanding accounting practices.

For more than 20 years, J.D. Hill served as borough treasurer and would assist with the audit, borough officials said. Treasurer duties have since folded into the borough manager’s role with the planned resignation of Hill’s successor, Dennis Montgomery, on Monday.

Six of seven council members took office this year, also contributing to the renewed attention on finances.

The goal is to improve Freeport Borough’s money management, especially in light of ongoing sewage rate hikes and a tax increase that went into effect last year, Mayor Zachary Gent said.

“I think that we lacked a sense of urgency before this council,” Gent said. “We are holding ourselves to the highest level of integrity.”

He noted that he doesn’t suspect any wrongdoing or negligence by past auditors.

“If anything was wrong, they thought they were doing it right,” Gent said.

Borough Manager Zachary Filous said the auditors were given a handbook to understand how to complete the audit on their own.

“Clearly, they decided it wasn’t worth the energy,” Filous said.

Council will appoint new auditors or hire a professional firm June 3, council President Rick Fennell said. He acknowledged the borough is “behind the eight ball.”

Though the state fiscal year ends at the end of June, failing to submit an audit doesn’t carry consequences until the end of the calendar year, Filous said.

“If I don’t have it by the end of this year, it will have repercussions on state funding the borough receives, whether it’s pension support or liquid fuels money,” Filous said.

Filous estimates a professional audit will cost between $5,000 and $10,000.

State law requires municipalities to pass an ordinance by two-thirds vote of council to hire an outside auditor. With that act, the elected board of auditors is abolished.

While material consequences are still months away, Gent is concerned about the appearance of missing the deadline. Last year, he noted, the borough also submitted its audit months behind schedule.

“Honestly, I think the most negative thing that can happen is it puts you in the spotlight when you don’t necessarily need to be in the spotlight,” Gent said.