State audit finds holes in Hobart’s bookkeeping
By Karen Caffarini Post-Tribune correspondent July 11, 2013 5:54PM
Updated: August 13, 2013 6:32AM
HOBART — A State Board of Accounts audit of Hobart’s 2012 books found deficiencies and a lack of managerial oversight in several areas, most of which a city official said were corrected during the winter while the audit was still under way.
Clerk-Treasurer Deb Longer said it was mostly a clean audit that contained few surprises.
“Any holes that were pointed out we filled in while they were here,” Longer said Wednesday.
Auditors found deficiencies in the way the city handled deleted receipts, adjustments made to utility bills in the sanitary district, overdrawn cash in certain funds and the temporary transfer of funds from the Wastewater Improvement Fund to the Hobart Sanitary District Stormwater Fund.
Auditors said while all deleted receipts were listed, it could not be established that all those receipts were for invalid transactions. They said there was no management oversight or approval to substantiate the validity of the deleted transactions.
Longer said there were no problems due to the lack of oversight, but the state pointed out there was a potential for problems to occur.
“We put a corrective plan in place,” Longer said. “It was a good learning experience.”
Now, each deleted transaction must have a copy of the deleted receipt with an explanation on why it was invalid that is initialed by both the clerk deleting the receipt plus either the deputy clerk or clerk-treasurer.
The Sanitary District office made adjustments to some residents’ utility bills when the amount appeared to be too high so they would coincide with normal usage, with no oversight by upper management or the Sanitary Board, the report pointed out. City ordinance does not allow for the waiving of fees, the report said.
Longer said the district will periodically provide the sanitary board with a list of all adjustments for consideration, providing board oversight.
She said each of the funds that have been repeatedly overdrawn — Local Road and Street, Cumulative Capital Improvement and Cops to School — was due to the city not being reimbursed for the programs during the calendar year in which the money was spent.
She said money needed to be transferred to the Stormwater Fund, which was just recently implemented, until tax money for Stormwater came through.
The audit also said the city court has kept unclaimed restitution and cash bonds for more than five years. Auditors said some bonds date back to 1983 and some restitutions go as far back as 1998.
Auditors said the money should be reimbursed immediately if possible. All fees and funds that are more than five years old should be paid over to the state attorney general’s office.
City Court Judge William Longer said the court has undertaken a review of outstanding items, identifying disbursement entries that need to be made and funds that need to be disbursed. He said funds held more than five years will be reviewed on a case-by-case basis.