Kokomo Tribune; Kokomo, Indiana

October 11, 2012

Audit: missing funds not accounted

No criminal charges filed, but court officials responsible to pay back the money.

By Carson Gerber
Tribune staff writer

Bunker Hill — A state audit report released last week revealed more than $37,000 garnered from traffic tickets has gone missing from the Bunker Hill Town Court. Court officials have denied stealing the money.

The State Board of Accounts audit says former Town Judge Melvin Smith and former Court Clerk Kimberly Zehring were responsible for processing and depositing money into the bank from traffic violations. The report says the court deposited less money than was shown on court accounting books 121 times from February through December of 2011.

The grand total they failed to deposit: $37,052.

So where did the money go? Court officials blamed it on the accounting software.

Smith said in a letter to the state he was never trained in the accounting system used by the court, and never personally entered any data into the system. He said he wasn’t aware of any accounting problems until December 2011.

“If I’m guilty of anything, it is being too trusting of what I considered a good, honest employee [Zehring],” he wrote. “I don’t feel that I should be held partially responsible for the missing funds since I did everything I could in full faith to maintain the integrity of the court.”

However, the audit report states no documentation exists to show Smith verified receipts from accounting

reports or reviewed or verified that the court’s accounts added up.

Bill Berkshire, an attorney representing Zehring, echoed Smith’s response in a letter written to the state.

“It is our belief that it is the computer system, not Judge Melvin Smith or Kimberly Zehring, that have led to the accounting errors presented by the State Board of Accounts,” Berkshire wrote.

But Mike Bozymski, Deputy State Examiner with the SBA, said it was “strange” court officials wouldn’t simply deposit the full amount shown in the court’s accounting system.

Regardless how the money disappeared, Smith and Zehring are responsible to pay back the money, said Bryan Corbin, public information officer with the State Attorney General’s Office.

He said once the attorney’s office verifies the audit

report, the state has a few options — send a letter demanding the money, file a civil lawsuit or freeze their financial assets.

The audit says both Zehring and Smith filed $5,000 in official bonds in 2011 in case money went missing.

Corbin said the state will take that money and require them to pay the leftover amount.

Indiana State Code says a public servant who knowingly or intentionally fails to deposit public funds commits a Class A misdemeanor. If the amount is more than $750, the charge bumps to a Class D felony.

But Miami County Prosecutor Bruce Embrey said last month there isn’t enough evidence to establish the missing money was stolen. He said there is currently no active criminal prosecution against either Smith or Zehring.  

“If more evidence is brought in, we’ll look at it,” he said.

Berkshire said it was Zehring who contacted the state in the first place when she discovered the missing $37,000, and argued the money wasn’t stolen.

“If someone wanted to steal money, one would just simply void the ticket and keep the money rather than put the entries in the computer,” he wrote.

Judge Smith served for seven years, but didn’t run for reelection in 2011. His term ended in December. Zehring stopped working as court clerk in February of this year, according the audit.