WILLIAMSTOWN, Mass. — An examination of the town's fiscal 2021 financials raised new questions about why residents were not informed earlier about deals struck in 2020 and early 2021 to buy out the contracts of the former town manager and police chief.

 

Auditor David Irwin of Pittsfield's Adelson & Co. met with the Finance Committee on Wednesday to go over his firm's audit of the town's finances for the year that ended June 30, 2021.

 

As usual, Adelson issued a clean report, meaning there were no accounting issues that arose during the audit. But there was a lingering issue that sparked questions from a member of the committee.

 

Dan Caplinger directed Irwin to a note on Page 29 of the auditor's report, under a section headed "Contingent Liabilities."

 

In that section, Irwin notes that during FY21 (July 1, 2020, through June 30, 2021), the town incurred liabilities of $133,182 for a separation agreement with former Town Manager Jason Hoch and $350,196 for a separation agreement with former Police Chief Kyle Johnson.

 

Irwin's report further notes that "subsequent to fiscal year end 2021, the Town settled a case with a former police sergeant for $307,900."

 

"We do ask those questions of the management of the town," Irwin told the Finance Committee about liabilities incurred after the audit period. "We also make direct contact with the town's attorney, and we get a confirmation letter if he's aware of anything."

 

Caplinger asked why similar "subsequent to fiscal year end" language was not included in the audit report for FY20.

 

"The date that drives that is the date of my audit report, which is Feb. 9, the date of the audit," Irwin said. "The reason that is is because, as your auditor, I'm not only responsible for information through June 30, 2021, I'm responsible for the information by the date I sign off on all the audit work."

 

The FY21 audit, which was the primary subject of Wednesday's Fin Comm meeting, was dated Feb. 9, 2022. The FY20 audit, where there was no mention of the payouts to Hoch and Johnson, was dated Feb. 9, 2021 with a watermark indicating it was a March, 11, 2021 draft.

 

Caplinger pressed Irwin a second time about why the Johnson and Hoch severance packages received no mention in the FY20 audit report, particularly when the former was negotiated in December 2020.

 

"In order to record these things inside the notes in the statement, the liability has to be known and estimable," Irwin said. "I was aware that the town was going through the proceedings with the police officers, but, at the time I completed my audit, there was no settlement agreement reached, as far as I was aware of.

 

"We include [in the FY20 audit report] a blanket statement that the town at this time can be a defendant in various lawsuits and so forth. But until something rises to a certain magnitude, as dictated by the accounting standards, we're not allowed to include it in these kinds of financial statements. So, these things were all finalized and settled in the 2021 year … mid-2021 year. So it all hit my report this year. Had this stuff been here last year, these disclosures would have been in last year's financials."

 

It was unclear in the meeting whether Irwin's statement about separation agreements being "finalized and settled … mid-2021" referred to calendar year 2021 or fiscal year 2021 [July 1, 2020-June 30, 2021].

 

If he meant calendar year 2021, that would not line up with the announcement of Johnson's departure from the Williamstown Police Department in December 2020 or Hoch's departure, which was being negotiated with the Select Board by at least Feb. 2, 2021, according to executive session minutes from the time.

 

If he meant fiscal year 2021, Adelson & Co. signed off on the FY20 audit report on Feb. 9, 2021, nearly two months after Johnson's separation agreement and in the middle of Hoch's negotiations.

 

iBerkshires.com reached out via email to Irwin on Thursday and Friday to ask when he communicated with Hoch and the town counsel to ask about additional liabilities incurred after June 30, 2020, in preparing the FY20 audit. At time of publication, he had not replied.

 

As previously reported, Hoch, who stayed on as town manager through town meeting after announcing his departure in February 2021, was asked during a March 2021 Finance Committee meeting about severance packages. He said that, specific to the police budget, there were no "severance funds" in the FY22 (current fiscal year) budget.

 

Later last year, after Hoch's departure, it came to light that the severance packages – long settled before the FY22 budget went to May 2021 annual town meeting – were being funded from the regular salary lines for town manager and police chief in spite of the town's intention (as of May 2021) to have permanent replacements in both positions before the end of FY22.

 

As it turned out, neither post will have a permanent replacement by June 30 of this year, but the town has been paying an interim town manager since Hoch's departure. The interim position that was not budgeted in the FY22 spending plan.