Possible Fraud Case Referred to Police and Attorney General's Office

This press release came from Swampscott's Acting Town Administrator Dave Castellarin.

The Swampscott Board of Selectmen and the Swampscott School Committee have received and reviewed the auditor’s “Fraud Examination Report” and have accepted the report and recommendations of the Town’s Auditor.

The Board and the Committee are committed to assuring that all Town and School operations under their purview are conducted according to applicable Massachusetts General Laws and regulations, and appreciates the assistance and recommendations of the auditor in that effort. 

Because of the lack of accounting records and documentation, the result of the fraud examination was inconclusive as to whether fraud occurred during the fraud examination period. However, the audit report does conclude that the system of internal control over cash receipts and cash disbursements were insufficient.  The report did find evidence of several violations of the municipal finance laws, as well as other related infractions.  Both the Board of Selectmen and the School Committee voted to refer the report to the Attorney General’s Office and the Swampscott police department for their review. 

Both the Board of Selectmen and the School Committee take these issues very seriously. Internal controls have already been designed, documented, and implemented to promote controls over cash receipts and disbursements related to school activities and student activity funds.   The School Committee is in the process of formally closing all bank accounts that do not fall under the Town that were previously held at the individual schools.  These funds will be deposited with the Town Treasurer going forward and managed and accounted for in accordance with Massachusetts laws.         

The report is not a public record, since it is going to be reviewed by the police department and the Attorney General and because it contains personal and personnel information.   Any additional recommendations which result from review of the report by the police department or the Attorney General will be carefully considered.  The Board and the Committee are pleased to have worked cooperatively on these issues.