Audit report slams Fort Shawnee finances
COLUMBUS, Jan 01, 2013 (The Lima News - McClatchy-Tribune Information Services via COMTEX) --
A newly released audit report for Fort Shawnee cites several administrative weaknesses and bookkeeping discrepancies that preceded the village's fall.
Inadequate documentation, unauthorized personal purchases and mingling of restricted and unrestricted funds were among several findings cited in the report, released Monday by Auditor of State Dave Yost.
Mayor Pete Mariotti, contacted at home Monday, pointed out the audit report covers calendar years 2010 and 2011 -- a period before Mariotti took office and attempted to dig Fort Shawnee out of financial distress. The report does not include finances for 2012.
"They have to do a final audit yet," Mariotti said. "The timing on that hasn't been identified -- I haven't been made aware of it yet."
Mariotti's effort to reverse the fort's fiscal slide was halted in November when residents voted to dissolve the village. Shawnee Township took over municipal services in early December. Attorneys for the village, township and Allen County are wrapping up the remaining village interests, a process that could be completed by February, Mariotti said.
According to the audit report, during 2010 and 2011 the village failed to provide detailed documentation to fully explain nearly $29,000 in bills for cellphones, natural gas, telephone/Internet service and insurance.
"The Village made payments to these providers electronically. Therefore, copies of the invoices may have not been printed from the vendors' website," the report reads.
After the state auditor's office identified the discrepancies, the village found invoices for all but $191 of the disbursements in 2011 and $2,427 in 2010.
The village discovered some other purchases, including a $795 television charged to the village's Visa account by the chief of police.
"This unauthorized purchase was discovered by the director of finance during her review of supporting documentation for credit card purchases for December 2011," the report states, adding the police chief reimbursed the village the same month.
Ben Kehres resigned as police chief in January 2012.
The village had not established a credit card policy or a cellphone policy in 2010 or 2011. Mariotti and the Village Council adopted policies in 2012.
"Inadequate supporting documentation eliminated a significant control point, obscured the audit trail and provided for the opportunity for errors and irregularities occurring and not being detected by management in a timely manner," the audit report states.
The report also found a lack of effective internal controls to help prevent errors in financial statements, noncompliance with laws or regulations and ethics violations. Specific shortcomings included:
-- Monthly bank-to-book reconciliations were not always performed in a timely manner and were not presented to the council for review and approval.
-- The fiscal officer failed to prepare timely bank-to-book reconciliations.
-- The fiscal officer failed to present the council with reconciliations and financial reports on a regular basis.
The Village Council did not receive monthly financial reports on a regular basis until October 2011. Beginning in January 2012, the council began receiving a fund balance report, budget versus actual expenditure report, and budget versus actual revenue report. Without oversight from the council, several village funds were overstated and understated by thousands and even tens of thousands of dollars, according to the audit report.
During 2011, beginning fund balances for the general fund, mayor's court computer fund and permissive motor vehicle licenses fund were overstated by $27,424, $1,304 and $5,109, respectively. Beginning balances for the street construction, COPS levy, police department grant and street improvement levy funds were understated by $19,827, $11,495 and $500, respectively, after corrections were made to the year-end accounting records.
The report cites simple errors in appropriation. In 2010, motor vehicle registration fees were improperly recorded in the general fund instead of the street construction fund, resulting in general fund intergovernmental receipts being overstated and street construction receipts understated by $3,189.
A similar error in 2010 threw off the street construction fund by $9,835 and the general, COPS levy and street improvement levy funds by $4,721, $3,764 and $1,350, respectively.
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