The City’s Trust Funds continue to be an item of interest as accounting for this money is troublesome. City leaders are now acknowledging publicly one issue as they have organized a special meeting titled “Trustees of Trust Funds” on Tuesday at 7:00 PM in the Aldermanic Chamber. However, no additional information has been provided to Board members or the public to prepare for this meeting.
I have been searching for the total dollar amount in the Nashua Center for the Arts Capital Reserve Fund (NCA CRF). How hard can it be when this account opened in late 2023? In 3 months, I haven’t been able to get the financial records for the NCA Fund. CFO Griffin wrote a memo to the BOA explaining that the City placed the NCA CRF money in a General miscellaneous revenue account without offering any explanation as to why this happened.
This was in direct violation of RSA Ch. 34:5. These funds did not belong in the General revenue account. In RSA Ch. 34:5, it specifically states that Trust funds “must be kept in a separate account and cannot be intermingled with other funds of the City.” The Finance Office originally set this up as a Miscellaneous Revenue account in the General Fund in violation of the Board’s Resolution to create this Capital Reserve Fund, non-lapsing and interest bearing. Therefore, the City took the Trust Funds of $36,114 and placed them in the General Fund which earned no interest and resulted in the balance zeroing at the end of the fiscal year.
The City has approximately $70M in the following types of Trust Accounts:
- Funded by General Fund Appropriations
- Solid Waste Fund
- Funded by Contribution
- Permanent Funds
- Pension Funds
- Agency Funds
- Private Purpose Trust Funds
At the beginning, July 1, 2024, the City realized the NCA CRF should not be under that Miscellaneous General Fund Revenue (#45820), and created a Trust account (#7087) in order to collect the quarterly contributions. However, the City neglected to transfer the $36,144 to the corrected account. Mr. Griffin’s memo failed to address the accounting error observed. Upon the City setting up the Trust Fund, it was set up as “Funded by Appropriations” rather than “funded by contributions.” This has not been corrected. Again, Mr. Griffin’s memo failed to address this accounting error. A trust fund funded by contributions is not subject to the City budget process and therefore, Mr. Griffin’s memo that identifies that this money will be transferred for the 2026 budget process is wrong. We should not have to wait for trust contribution to be placed in the Trust Fund, because the City failed to correctly set-up the account.
Unfortunately, Mr. Griffin’s memo lacks credibility and does not include supporting financial data. It creates more questions than answers.
In nine years in office, Mayor Donchess failed to appoint the members of a state-required Board of Trustees for the City’s Trust Funds. Additionally, he has not convened any public meetings for this Board, which should oversee approximately $75 million in trust funds.
According to RSA Ch. 34 on Trusts, the City is required to send annual forms to the Department of Justice, Charitable Trust Unit (CTU). I requested the City provide the 2020 – 2024 MS-9 and MS-10 Forms. The City responded stating they would get back to me in 5 weeks as follow-up. These should be readily available push button financial reports. In contrast, I filed the same Right to Know request with the State Department of Revenue on December 23rd at 10:30 PM, and I received all the records (though the City had not filed for 2024) within two business days. Nashua’s leaders and legal office continue to be uncooperative and not transparent.
Perjury is a Felony under NH RSA 641:1
The City potentially perjured the information on the State forms by listing the Chair of the Library Trustees as the Chair of the Board of Trustees for the City Trust Funds when the City Trustee Board did not exist and does not exist, as of today. The person listed on the forms was unaware that their name was on these documents.
The MS-9/MS-10 form also states:
This ledger was reviewed for accuracy and submitted electronically under penalty of perjury on September 23, 2022 by Joanne Boisvert on behalf of the Trustees of Trust Funds of Nashua.
Once again, there are no trustees of City trust funds in Nashua. For years, Nashua appears to have knowingly and willingly falsified these reports to the State. Perjury is a felony under NH Statute 641:1. City and Town Trustee Boards must meet annually to review and update their investment plans and approve financial filings. New Hampshire Town typically elects its Board of Trustee members, while in cities, Board members are usually appointed by their Mayor. It seems that filing out state forms in this manner is acceptable to Mayor Donchess.
The Annual City Audit
These Trust accounts are to be audited yearly by the City auditor. The City hires Marcum LLC (formerly Melanson Heath) to conduct an “audit,” which serves as a review of the records, rather than a detailed audit. Marcum depends on city officials to provide accurate information. Did Marcum use the Generally Acceptable Accounting Principles (GAAP) to review the City’s account records? Most likely, if the City provided the MS-9/10 Forms to the auditors, they may have provided potentially fraudulent information which was accepted without scrutiny.
Why does the Mayor want to take over the Library Trust Funds?
The Library Board of Trustees is responsible for its own Trust Funds and appears to have managed the finances responsibly. In August 2024, a citizen request for records for all city investment securities went unanswered. After months of back-and-forth, records were finally provided from June 2023. However, the frustrating nature of this process raises legitimate concerns about whether the City has provided all the documents necessary for complete accountability.
City leaders have been planning to merge the Library Trust Fund into the City Funds for the past four months. They have been working, opaquely, to rewrite City ordinances, develop an investment plan, and educate the Library Board of Trustees in an effort to persuade them to transfer the Library Fund’s money to the City. This ongoing process has been undertaken without any reports to the Board of Aldermen. Citizens have been inquiring about these Trusts for five months. Why is there so much secrecy surrounding this issue?
In September 2024, after the City Treasurer met with the Library Board to convince them to give the management of their Trust funds to the City, the City Treasurer requested the Trust Account send the MS-9/MS-10 State forms to the Library Board for their review. It appears only the MS-9 Form was sent and it was the City’s Excel spreadsheet which did not have the cover page that is part of the state filing. This page showed the Library Trustee Chair as the Chair of the City Trust Funds and the sworn perjury statement. This appears to be an omission to conceal the potentially illegal use of a persons identity and a non-existent Board.
What should the City do to Restore Public Confidence in the Management of Public Funds?
- Conduct a full audit of Nashua’s Trust Funds by an independent auditor. No one has been approving the withdrawals, and transfers on these accounts. Given the remedy of violations permitted under the state Statutes, state oversight should be done.
- Update the Nashua Revised Ordinance for the City Board of Trustees and its Duties and obtain the Board of Aldermen’s approval before convening a new City Board of Trustees.
- Seek knowledgeable volunteers (financial background) and advertise the two Mayoral Appointed seats. No Trustee Board member should serve in a dual position on the City Trust Funds. Given the Fund’s lack of transparency and mismanagement, the BOA should not take conflicts of interest lightly.
- Exclude the Mayor and Treasure as voting members (ex-officio only). Our Mayor, Board President, and Treasurer have operated with deception and deliberate disregard for the law. Permitting those three to be the voting bloc of the 5-member Board overseeing $75M would put the fox in charge of the hen house.
The ongoing lack of transparency in the management of these Trusts is becoming increasingly concerning. For months, citizens have sought clarity and answers from their representatives, yet there has been no feedback to the Board of Aldermen or citizens. This silence is not just frustrating; it raises questions about accountability and governance.
Transparency is essential in maintaining trust between the community and its leaders. Why should residents be left in the dark about matters that directly affect them? It is time to prioritize open communication and provide the public with the information they deserve. City leaders must address this issue openly and work towards a solution that fosters trust and demonstrates their commitment to the community.
