Probe Uncovers No Evidence Of Widespread Embezzlement, Theft, Fraud

Haverhill Woodsville Precinct #filephoto

Six audits.

Lots of red flags.

No clear-cut criminal activity.

A financial probe of the Woodsville Fire District for the years 2015 to 2020 uncovered significant problems: The record keeping was sloppy, the accounting system was disjointed, and oversight in some cases was non-existent.

But the extensive fraud, theft and embezzlement that some suspected?


To be sure, some findings raised eyebrows. Notably, Water and Light mis-classified an employee and had to repay $127,427.97 to the New Hampshire Retirement System.

But nothing like the “millions of dollars” in missing money a former Select Board member claimed.

The audits were ordered by the Department of Revenue Administration, because Woodsville had failed to submit timely audits as required since 2014, and were performed by accounting firm Plodzik & Sanderson of Concord.

Scott Eagen of Plodzik & Sanderson presented the results of the final audit (2020) at the Dr. John A. Baconzi Community Building on Nov. 16.

Most of the problems detected in the audit dealt with a lack of “internal controls” designed to prevent, detect, or correct financial misstatements, he said.

Eagen cautioned that audits aren’t foolproof, and resident Marilyn Blaisdell said serious transgressions had occurred.

“Some people [are] saying that there was no fraud or illegal activity found. They think that’s a blanket statement. And that’s not true. There’s been all kinds of things found,” she said.

But Kevin Shelton, who stepped into the newly created District Administrator position last year to bring Woodsville into compliance, said the audit ultimately vindicated the precinct.

“I don’t feel [the claims of missing money] were justified, based on the six years that I’ve looked at,” he said.


Plodzik & Sanderson produced a 64-page report on the 2020 audit.

In it, they issued three “adverse opinions,” which found the financial statements for the water fund and electric fund were inaccurate, and could not be corrected due to insufficient records. As a result, the financial health and performance of those funds could not be determined.

In addition, Plodzik & Sanderson identified more than 30 significant issues, classified as “material weaknesses,” that need to be addressed.

Many of those “material weaknesses” were already highlighted in the 2015 through 2019 Woodsville audits.

The following is a partial list:

Financial Management: Woodsville’s accounting and information systems were insufficient, the audit report stated.

Precinct finance records were decentralized. Department expense and billing systems were not integrated. Payments were done through consumer-grade software. Budget oversight was insufficient.

Plodzik & Sanderson recommended that the district implement a full general ledger system to record all district financial activity, and review the revenue-expenditure budgets on a monthly basis.

Maintenance Of Records: Woodsville kept shoddy records, according to the audit report.

Some records for the audit period were incomplete, difficult to find, or could not be located.

Meanwhile, WFD Commissioners’ meeting minutes were handwritten, frequently illegible, vague, and incomplete.

Plodzik & Sanderson recommended that Woodsville create a centralized and systematic record-keeping process and take more care with meeting minutes.

Checks and Balances: Oversight was lacking across departments.

The audit identified instances where a single person was responsible for handling a facet of department finances.

That included three people in Water & Light (payroll, cash collections, cash disbursements), two in Woodsville Fire (cash collections, cash disbursements), and one in Woodsville Ambulance (billing and collections).

Plodzik & Sanderson recommended shared responsibilities to improve accountability.

Non-Compliance With State Statutes: The district improperly used $45,000 from the accumulated water, electric and sewer funds for payments in-lieu of taxes.

Also, the district failed to properly report debt service expenditures to DRA; did not record the annual budget in its general ledger accounting software; and did not utilize account numbers for internal reporting.

Payroll and Benefits: The district did not have documentation supporting employees’ initial rates of pay, or changes in pay rate. There were no records of the Board approving annual cost of living adjustments or weekend pay rates.

In addition, commissioners were provided insufficient documentation to perform payroll review.

Water & Light Employee: Water & Light wrongly classified an employee as part-time and failed to report the employee’s full-time status to the New Hampshire Retirement System, according to the audit report.

The employee has been ordered to return more than $350,000 to NHRS, pending appeal, and the Woodsville Fire District has already paid $127,427.97 in unpaid contributions to NRHS.

The employee also earned compensatory time for overtime worked, which was self-reported and does not appear in payroll records, but which the employee cashed out when they stopped working for Water & Light on May 7, 2020.


Shelton, who stepped into the newly-created Woodsville administrator role in March 2020, said many of those “material weaknesses” have been addressed.

He outlined 21 actions the district has taken to address problems identified in the audit reports.

Those measures are far-ranging.

According to Shelton, record-keeping has improved. The precinct moved all of its records into a secure facility in the Water and Light basement and the Board of Commissioners meeting minutes are now recorded, approved and made available within 24 hours.

Meanwhile, checks and balances were strengthened, he said. The district has outsourced ambulance billing to a third-party vendor, all time sheets are signed off by supervisors, billings and deposits are handled by separate employees, check writing privileges have been reduced to “a few people,” all checks are signed by the district treasurer, and Shelton conducts regular budget monitoring.

In response to the Water and Light/Retirement System situation, the precinct has increased oversight of earned and sick time, documented pay rates, and required that payroll manifests be signed by the Board of Commissioners.

The precinct has also implemented the proper procedures for borrowing — including public hearings and voter approvals — and the consolidation of the computer and software systems are underway.


For some, the audit and the report were secondary.

Many, like resident Jay Holden, wanted someone to address rumors of wrongdoing in the Woodsville precinct.

At Tuesday’s presentation, Holden asked representatives of Plodzik & Sanderson if they found evidence of fraud, theft or embezzlement in the audit reports from 2015 to 2020.

“All the innuendo that there were millions of dollars that were squirreled away. I just want to put this to bed. You found nothing like that in the audits you folks completed for us?” Holden asked.

Eagen said matters of fraud, embezzlement and theft were legal determinations.

He called it a “loaded question” that an auditor could not fully answer, but said the information he reviewed did not reveal anything nefarious.

“The six audits did not detect any fraud. What we have found is noted in our comments and consists of internal control matters and non-compliance,” he said.

That prompted Blaisdell to step to the microphone.

She said the audit did not absolve the precinct. She pointed to the matter of the Water and Light employee, a violation that Eagan personally reported to the New Hampshire Retirement System.

“You should not be sitting up there saying there was no fraud found if you can’t call it,” she said to Eagen. “You found questionable things, then you reported them, and someone else determines if they’re fraud. So when someone asks you if there was any fraudulent activity, you can’t sit there and say no.”


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