A New Milford resident is questioning the quality of financial record keeping in the town.

According to a forensic audit by BlumShapiro in June 2010, $18,000 in funds disappeared from the town's Building Department between 2007 and March 2010.

The town's insurance company reimbursed some $28,000 to cover the missing money and cost of the forensic audit. That audit has not been released by town officials as it is part of an ongoing criminal investigation by the state police.

However, year-end audits by BlumShapiro for fiscal years 2009 and 2010 cite a "material weakness in internal control over financial reporting."

A July 2010 letter from the state Office of Policy and Management asks for a corrective action plan from the town to address "significant deficiencies in internal control" cited in successive audits.

"It's just sloppy," resident Jeff Winter said of the way town finances are managed. "I'm not the one saying it, the auditors are saying it."

"The state's Office of Policy and Management is saying it," he reiterated.

Finance director Ray Jankowski explained year-end discrepancies in the town's books for 2009-10 as being caused by financing for the new ambulance barn, straddling fiscal years.

He said a lack of correlation between Board of Education and town financial records cited in the recent audit will be corrected at the start of the new fiscal year in July.

With a new financial director at the education board, this problem will be rectified, Mr. Jankowski said. And a correlation of the books was achieved after review, he added.

The auditor's finding that new financial software is required was addressed by funds included in the 2011-12 budget when it was set March 9 by the Town Council .

"The auditors are getting picky," Mr. Jankowski said Tuesday.

"What they offered are recommendations. Overall, I don't consider their comments to be materially indicative of our internal controls."

Mayor Pat Murphy supported Mr. Jankowski's stand on the issue.

"We can't release the forensic report at this time," said the mayor, "but when it is released it will be evident the situation by which the money went missing was outside our normal financial review records."

Corrective action has been taken to assure a further loss of funds will not occur, both the mayor and Mr. Jankowski said.

Ms. Murphy added if a problem were to exist in the finance office "the Board of Finance would have directed Ray to take corrective action.

"That didn't happen."

The town is seeking a new auditing firm to conduct the year-end audit, of June 30, 2011.

A legal notice requesting proposals ran in the March 11 edition of The Greater New Milford Spectrum.