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State Auditor Slams Green Township For Money Mess

Cyn Mackley by Cyn Mackley
4 years ago
in Economy, Politics
State Auditor Slams Green Township For Money Mess
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State Auditor Slams Green Township For Money Mess

Ohio Auditor of State Keith Faber had some choice words for Green Township in an audit for the 2018/2019 fiscal year. The report says the township with a population of just 3,900 people, spent hundreds of thousands of dollars unlawfully, made massive accounting errors, and failed to properly pay payroll and Medicare taxes as well as Ohio State Retirement Fund payments.

The report called out the township trustees for not filing its financial statements with the state on time.

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The report also said the township’s fiscal officer failed to attend the continuing education programs provided by the state and also failed to file an exemption to skip the training.

The report also cited what it called an “internal control deficiency.” That basically means that the township failed to keep organized records and receipts for financial transactions.

No Receipts For Fire Truck and Ambulance Purchase

Among the transactions the township failed to provide receipts for were close to $200,000 in expenditures for fire equipment:

  • Supporting invoice documentation for check #23919 was paid to Finley Fire Equipment in the amount of $60,000 on August 22, 2019, to pay for the down payment for an ambulance.
  • Supporting invoice documentation for check #21999 paid to Finley Fire Equipment in the amount of $110,153 on January 1, 2018, to pay for the down payment for a fire truck.

The township also could also not find a credit card statement from September of 2019. The state agreed that the money was a legitimate expense, the township just failed to document it properly. Also AWOL, several voided checks.

Failed To Withhold Taxes

On another serious note, the township was missing documentation for employee withholdings (such as W-4’s, OPERS enrollment forms, etc.) and leave approval forms. According to the report, “There was no evidence they paid the correct amounts or submitted the required annual reports,” for 2018 and 2019. However, the state believes that the taxes were indeed withheld but there is a discrepancy of several thousand dollars.

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The fiscal officer also failed to submit federal income tax and Medicare taxes on a monthly basis in both 2018 and 2019.

In the report, Faber said, “Failure to maintain underlying documentation and support of financial transactions can increase the risk of fraud, result in financial statement misstatements, and expenditures that are not for a proper public purpose.”

The township also failed to pay the proper amount of money for employees into the Ohio Public Employees Retirement System. For February of 2019, the difference was just shy of $4,000. Some months were over, others were under. In the end, the difference for 2019 balanced out to $202.

For 2018, the difference was $1,222. Again, some months were substantially over, others under. The report warned that failure to pay the right amount on time can result in late fees and penalties. The auditor said that matter would be referred to the Ohio Public Employees Retirement System for further review.

$800, 000 in Unlawful Spending

The report also called out the township for failing to have a proper plan in place to dispose of outdated records.

But that wasn’t all. It turns out that the township trustees were not properly bonded. Each trustee is required to give $1000 to the state.

Trustees also failed to notify the Scioto County Auditor of the amount of tax money they had available to spend. This causes the county difficulty in figuring out how much they have available for budgeting.

Trustees also failed to properly approve appropriations bills according to state regulations.

The lack of proper control over the budget caused the township to spend close to $800,000 that was not appropriately approved by the county. There was a shortfall in 2019 of $84,322 and in 2018 the discrepancy was $20,403.

According to the report, 100% of the spending for 2019 and 2018 was unlawful due to the failure of the fiscal officer to file the correct appropriations with the Scioto County Auditor’s office. This resulted in over $3 million in discrepancies. Again, the state is not alleging anyone stole or improperly used money. However, the lack of proper accounting procedures could allow this to happen.

It Doesn’t Add Up

When the township did file financial statements, they didn’t necessarily add up. The audit says these errors were made in 2019.

  • General Fund Tax Receipts and General Government Disbursements were both understated by $55,791 due to the Fiscal Officer not posting tax revenues at gross.
  • General Fund Ending Cash Balance was understated by $7,458 due to various immaterial adjustments that were identified during a proof of cash procedure.
  • Road and Bridge Fund had $29,041 misclassified as Public Works Disbursements that should have been Capital Outlay.
  • Gasoline Tax Fund had $80,000 misclassified as Public Works Disbursements that should have been Capital Outlay.
  • Motor Vehicle License Tax Fund had $20,000 misclassified as Public Works Disbursements that should have been Capital Outlay.
  • Total Special Revenue Funds Ending Cash Balances were overstated by $28,599 due to various immaterial adjustments that were identified during a proof of cash procedure.

In 2018:

  • General Fund Tax Receipts and General Government Disbursements were both understated by $44,628 due to the Fiscal Officer not posting tax revenues at gross.
  • General Fund General Government Disbursements was understated by $18,060 due to various posting errors by the Fiscal Officer.
  • General Fund Ending Cash Balance was overstated by $24,022 due to various immaterial adjustments that were identified during a proof of cash procedure.
  • Miscellaneous Capital Project Fund Intergovernmental Receipts and Capital Outlay Disbursements were understated by $60,000 due to the Fiscal Officer not posting the on behalf activity from the Ohio Public Works Commission in their accounting system.
  • Road and Bridge Fund had $35,000 misclassified as Public Works Disbursements that should have been Capital Outlay.
  • Gasoline Tax Fund had $119,918 misclassified as Public Works Disbursements that should have been Capital Outlay.
  • Total Special Revenue Funds Ending Cash Balances were overstated by $74,582 due to various adjustments that were identified during a proof of cash procedure.

The fiscal officer also failed at one of the most basic things you can do to manage your money. The township didn’t balance its monthly bank statements. For 2019, the difference was nearly $200,00 and in 2018, around $180,000.

The auditor concluded that the fiscal officer didn’t provide the board of trustees with accurate balances reports or accurate listings of payments. Nor did the township receive copies of canceled checks.

According to the report, the Auditor’s Office had not received a response from township officials at the time the report was issued. Additionally, the Ohio Auditor’s Office said the issues had not yet been corrected.

Source:

https://ohioauditor.gov/auditsearch/detail.aspx?ReportID=4de22cf0-2f38-49bd-a932-50f9b1e4b1fc

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