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Residents press auditor over $60K in reclassified legal fees; auditor flags restatement, says further review possible
Summary
Residents and trustees pressed the independent auditor about two late FY25 reclassifications that shifted more than $60,000 in village-paid legal bills to the town. Auditor Tyler Kimberly said the FY24 restatement corrects a deferred ARPA inflow and that the firm will note reclassification risks in future audit procedures.
Residents and board members pressed the municipal auditor on July 2 over late-year journal entries that reclassified more than $60,000 in legal invoices from the village to the town.
"It's clear that mister Duffy did something illegal," resident Nicholas Seldon said during public comment, calling for the boards to tell the auditor that the legal fees did not relate to the lawsuit. Seldon and other residents said two reclassifications — one in May and another in July — combined to move roughly $63,000 in expenses and thereby reduced the village's reported fiscal-year deficit.
Tyler Kimberly, the independent auditor present for the meeting, told residents the audit team identified a FY24 accounting error during the FY25 audit and proposed a restatement. "That amount of $78,009.40 should have been revenue in fiscal year 24," Kimberly said, explaining that ARPA funds had been recorded as a deferred inflow and were moved to revenue to correct the statements.
On the specific question of journal-entry support for the legal-fee reclassifications, Kimberly said auditors review trial balances, the general ledger (including journal entries), invoices and any legal documentation provided by management. "We looked at the legal invoices, and then we reviewed some legal documentation that we got forwarded from the lawyer," he said. Kimberly acknowledged that a lack of notations or supporting documentation raises audit risk and said the firm will give additional scrutiny to such items in future procedures.
Residents and trustees pressed for clarity about the timing and authorization of the entries. Allison Taylor, who reviewed public records and invoices after public-record requests, told the auditor she found two reclassifications that reimbursed the village for legal bills it had previously paid and that she did not find notations supporting those entries. Kimberly said the audit team had examined invoices, coding on invoices and footnotes and would continue to follow up where questions are raised.
The exchanges did not produce a formal finding or change to the current audit report at the meeting. Kimberly asked that the questions and documents be included in interim work for the FY26 engagement so they could be reexamined. Residents urged the boards to adopt internal controls requiring board sign-off on reclassifications going forward; the boards reported having instituted such a policy.
What happens next: the auditor recommended that the board and management make supporting documentation and minutes available to clarify reclassifications, and several residents asked the boards to consider appointing additional independent oversight.
