For quiet towns that do not receive much national coverage, the idea of a widespread and serious financial scandal is difficult to fathom. The Wall Street Journal reported, however, that the New England community of Winsted, Conn., is missing more than $2 million taxpayer dollars because of a string of embezzlements that occurred between 2008 and 2012.
Henry Centrella Jr., a 58-year-old ex-finance director of Winchester, the town to which Winsted belongs, systematically committed accounts payable fraud to support his gambling habits. According to the source, he was also spending the town's money on an affair he was having with a woman who is currently a resident of Florida.
The source reported that the town first discovered the missing funds when $2.3 million was uncovered in overdue bills. The fraud resulted in a deficit of approximately $1.173 million in the upcoming month of December, which could be devastating for the town's school district. Of Winsted's $33.7 million budget in the fiscal year, $20 million is allocated to providing education for over 1,200 students.
The Register Citizen reported that this incident has been a positive learning experience. With the previous model, one individual was responsible for the maintenance of the community's budget. As the finance director, Centrella had access to the town's funds and the authority to make decisions that affected the way the town spent its money. According to the source, however, 15 new accounting procedures have been implemented that will change the way the town utilizes accounting solutions, the mishandling of cash and ultimately, control over funds.
The source noted that Centrella is facing five counts of first-degree larceny.
Although positions of unilateral control over a source of money can reduce the amount of payroll spent on checks and balances, it is important for townships and organizations to make use of audit solutions in order to mitigate instances of internal theft.