The state Municipal Accountability Review Board voted Thursday to recommend taking additional control over the finances of the city of West Haven, following an audit which found the municipality had misspent most of its COVID relief funding.
The final decision on whether to elevate West Haven to Tier IV oversight status will fall to Gov. Ned Lamont after a 30-day comment period. However members of the MARB, including Lamont’s budget secretary Jeff Beckham, voiced doubts about the city’s accounting policies, which were uncovered by an independent audit conducted by the firm CohnReznick.
“It’s clear that this latest episode, that CohnReznick documented, points to serious governance issues and serious lack of financial controls and other weaknesses,” Beckham said. “I’m hopeful we can get to a positive result for the city and its taxpayers — and for state taxpayers as well.”
West Haven’s finances have long been subject to the board’s scrutiny, but the action recommended Thursday would give the state body final approval of the city’s operating budget.
The CohnReznick audit came as a result of charges against former state Rep. Michael DiMassa, D-West Haven. DiMassa resigned from the legislature and a West Haven municipal position after federal investigators charged him with embezzling more than $630,000.
The audit concluded that roughly 80% of West Haven’s spending of COVID relief funds should not have been allowed due to ineligible expenses or insufficient documentation and attributed the errors to a lack of internal financial controls in the city’s government.
Board members on Thursday told West Haven officials that the missteps found by the audit could have been avoided had city officials heeded guidance from the board. Sal Luciano, a labor leader and member of the board, said that West Haven had fooled the MARB, “many, many times.”
“[T]he state rep stealing the money, it breaks my heart that he did so but had the city followed our recommendations, it would not have been possible,” Luciano said. “Therefore, with a heavy heart, I don’t see any other options for us except to go into Tier IV.”
West Haven officials voiced opposition to the move, with some worrying it would lead to an increase in the city’s mill rate. Mayor Nancy Rossi cast a vote against the additional state oversight. Rossi pushed back against the findings of the audit and defended the actions of the city’s government. She said had worked hard to get its finances under control since taking office.
“Everything was broken and when I say everything was broken it was everything was broken,” Rossi said. “We did look at the financial end first and we worked very hard on that and I know we have made major strides.”
Mitchell Gallignano, a member of the city council, said Tier IV was the wrong path for a municipality, which he characterized as heading in the right direction. He laid blame for the town’s current predicament largely at the feet of DiMassa, who is facing fraud charges in federal court.
“We did have a state rep, who was well-trusted in our community, who we would have never thought would’ve, what I would call ‘stab us in the back and twist the knife as he’s pulling it back out on us.’ That was absolutely horrible. I get that should’ve been found quicker than it was,” West Haven Council Member Mitchell Gallignano said.
However, board members said the audit’s findings reflected years of mismanagement.
“The audit is really just the crescendo of ongoing trouble over the last few years and certain shortcomings of this administration as far as budgetary matters go and some other things,” Patrick Egan, board member and Fairfield’s risk manager, said.