The town uses various accounting groupings, based on function, for financial budgeting and reporting.  Examples include education, public safety, social services, etc.  There is a total line at the end of each grouping. 

A user of these statements would logically conclude that any figure appearing next to a “Total” label would represent the total spending for that functional grouping for the period in question.  But such a conclusion would be incorrect .  For the town aggregates all its spending for personnel benefits under a separate program, Shared Expenses.  The Department of Public Facilities is also a shared expense.  

Shared expenses is bad accounting.  it is contrary to the very purpose of cost accounting, which is to ascribe expenses to the "activities" that drive them. Residents would have a much more accurate understanding of each town department's true operating costs if the town, at a minimum, provided a supplemental schedule allocating the shared expenses to all the beneficiary departments.  Whether expenditures are "discretionary" or not is irrelevant. 

As an example of how it should be done, look at this budget document from our neighboring town of Belmont.  Fringe expenses are reported at both detailed levels and as an aggregated amount.  Or consider this quote from the City of Cambridge's budget document: "In order to present the most accurate picture possible of the true costs of the individual departments, health and pension costs (as well as those of certain other employee benefits) are allocated directly to departmental budgets."

Of course these types of expenses should be procured via the largest bargaining units available, including multi-community consortiums.  But that doesn’t mean the town has to account for it that way.  Procurement and accounting are two different things.

Lexopengov.com believes the residents of Lexington should ask that the town improve its accounting practices regarding the shared expenses account.   Please contact your precinct’s TMMs and ask that they inquire about this.  A list of TMMs can be found here.