ECA Elimination of Financial Continuity

Portions of a statement presented and submitted to the Eastman Board 12-20-11 by Robert Logan

The recently released Financial Planning and Management Task Force report states in its observations section that operational issues contributed to last year’s operational over-spending of the approved FY2011 Budget by $170K. The observations are incomplete when it comes to identifying the abuse of power by the Board. The process whereby the committee’s report was reviewed with the Board in sessions closed to community members is an inappropriate handling of numerous governance failures to perform. Furthermore, the fact that this committee has not reported its findings to the community in an open community Forum violates one of the Board’s own ethical principles which is “Encourage open, transparent discussion of matters relevant to the well-being of the Eastman community and its members”.

…………..

Nevertheless, the Board rapidly implemented major financial re-structuring as demonstrated in the FY2013 Budget (and all subsequent financial) documents using the FP&M Report as the justification. This reduced full financial visibility and accountability of various cost centers within the community. ………..

 The elimination of financial continuity in Eastman’s Budget and Financial Reports is not warranted based on the FP&M Task Force Report. The Eastman Board did not oversee a proper open community dialog on the changes. I am therefore requesting that the FY2013 Budget and Financial Reports be done consistent with the format and criteria we have used for the past several years. If the Board thinks that the new format is appropriate, it needs to commence a community dialog on those changes and the rationale behind it. Assuming this process gains community buy-in, the changes could be implemented in FY2014.

The denial that government officials can violate a community’s ethical principles is an invitation to do more of the same. Likewise, being soft on conflict of interest interpretation is permission for more offenses.

This community needs an outside objective review by an independent board of certain actions by this Board in the past 18 months. The independent review board must review reasonably stated complaints from citizens versus the governance’s stated ethical principles and code of conduct as to what inappropriate actions may have occurred regardless of whether a policy existed or not. The creation of this board needs to be done by the Council President—as this is the government entity that supposedly is a check and balance for this community. There could be three members on the independent board which could include individuals from any of the following groups-- the Ombuds office at Dartmouth, a member of the Political Science Dept at Dartmouth, a member of the NH Citizens Alliance, Elizabeth Warren, a member of the local clergy who has no connection to Eastman and has served as a member of a similar independent review task force. I look forward to your immediate action on this matter.

Postscript—the Board and the Council Chair rejected my recommendations and continued to destroy the integrity of Eastman’s financial reports. They failed also to publish my recommendation in Board Minutes.

Further details on financial manipulations are contained in ECA Board Request and Why Eastman is being Redefined.

Submitted by Robert Logan who is the CEO of a consulting practice since 1993 which provides expertise on improved business, financial and operational performance as well as leadership.