Kokomo Tribune; Kokomo, Indiana

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January 23, 2013

Windfall officials may owe $19,000

Prosecutor asking for ISP investigation.

WINDFALL — The Indiana State Board of Accounts has requested three Windfall town officials to repay $19,259 for payments of penalties and interest, overpayment of salaries and faulty bookkeeping during 2010 and 2011.

The scathing audit report was issued Jan. 16 and has been turned over to the Indiana Attorney General’s office and Tipton County Prosecutor Jay Rich for possible criminal and civil legal action.

Because the two-year audit required additional time to complete the state wants two former clerk-treasurers to pay $9,080 for the cost of the audit.

Rich said Wednesday he has requested an investigation by the Indiana State Police as a result of the audit.

“Audit costs or other costs incurred because of poor records, nonexistent records or other inadequate bookkeeping practices may be the personal obligation of the responsible official or employee of the government unit,” the audit read.

The audit cited several deficiencies in the internal control system for the town’s financial transactions and reporting.

Current Clerk-Treasurer Kay Clark said Wednesday that to her knowledge no funds have been repaid to the town.

“We were expecting a bad audit,” she said. “We’re fighting an uphill battle.”

Clark said she is working on correcting the bookkeeping problems.

Lonnie Kinder, president of the Windfall Town Council, said he believes the bonding company will pay the town and then seek the funds from the two individuals.

“It didn’t surprise me a bit,” he said. “We had a couple of clerks that were having problems. There was a time the office wasn’t open for a couple of weeks.”

During an exit conference with town officials they agreed with the findings of the audit.

Former clerk-treasurer Carol Short, who served in the position the last four months of 2011, was requested to repay $10,999 to the town.

Short reportedly overpaid herself $1,167 in salary and made an adjustment to her utility bill in the amount of $486. The state also wants her to repay $1,299 for penalties and interest, faulty deposits in the amount of $2,411, lack of supporting documentation in the amount of $250. Short is being asked to pay $5,385 of the state’s audit costs.

Joni Pearson, who served as clerk-treasurer from Jan. 1, 2010 through July 29, 2011 is being asked to repay $7,549 for audit costs and penalties and interest paid on late bill payments by the town.

Telephone numbers for both Pearson and Short have been disconnected.

Shaun Schambers, town marshall, is being asked to repay $710 to the town for not issuing receipts for the issuance of gun permits in 2011. The audit indicates that Schambers is now complying with state requirements.

Neither Pearson or Short attended the exit conference with auditors from the Indiana State Board of Accounts, although both were invited by either certified or a hand-delivered letter.

The state audit found that several of the town’s accounts were overdrawn including $237,213 in payroll in 2010 and $261,447 in 2011. As of Dec. 31, 2011, the water utility owned the payroll fund $87,654 and the Wastewater Utility owned the payroll fund $149,743.

Also discovered were problems in the utility accounts including that no bills were issued in July or August 2011. The shut off policy for the water utility was never enforced, there is no ordinance or resolution pertaining to travel policy, credit card purchases of leak adjustments.

Utility customers owed the town $277,963 on July 21, 2012 of which $197,886 were at least 90 days past due.

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