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Commissioners discuss 2010 treasurer audit

September 10, 2011

Starke County Commissioners Kathy Norem, left, Dan Bridegroom, middle, and Jennifer Davis, right.

KNOX - The results of the audit conducted on the 2010 records for the county treasurer has been returned. The results were discussed at a special meeting Friday evening that was conducted by Starke County Council President Mark Smith, and Starke County Commission Pesident Dan Bridegroom, and Starke County Commissioner Kathy Norem.
Starke County Treasurer Linda Belork was removed from office and all the treasurer employees were fired Thursday, Aug. 11 following a unanimous decision by Bridegroom, Norem and fellow Commissioner Jennifer Davis. This action was taken because of a large number of errors in record keeping that caused hundreds of thousands of dollars appear to be missing. In an effort to keep the office running as smoothly as possible, the county appointed two employees, Casey Clark and Michelle Snowdon, to maintain the duties of the office until the issues in the treasurer's office could be resolved.
The annual financial report from the State Board of Accounts for 2010, weighing in at a lengthy 50 pages, explained that from March 2010 to 2011, there was a “failure to post the entries pertaining to the remittance of various payroll withholdings to the proper authorities.” After being granted the ability to review the county’s bank statements and depository information, Starke County Auditor Kay Chaffins made a number of corrections to the situation, totaling $869,050 for 2009 and $614,672 for 2010 in the county’s ledger. Unfortunately, not all the issues have been resolved; $21,906 is still unaccounted for, and there are still a number of problems with the 2009 audit.
“What was found in the 2010 was payroll deductions not being done, but that is not the case in 2009. Those were being done properly from 2009 up until March of 2010 apparently, so whatever issues are unresolved from that 2009 audit are still unresolved,” said Smith.
Although, Smith is hopeful that it is just a simple matter of looking back at the 2009 records, as it’s possible the discrepancies were caused by an error in the formula used to calculate balances. If that’s the case, the county may not have to pay for an outside accounting firm to analyze the books and find the source of the discrepancies.
“I’d personally like to have Kay (Chaffins - Auditor) look at it, and I’d also like to have maybe even some further discussion with the State Board of Accounts as to their feelings on that. And, if the folks we have in place right now are not able to come up with a solution then I am personally ready to go ahead and hire a firm,” said Smith.
The situation could have been much worse, however. When the State Board of Accounts first found the large number of errors, they declared the county’s audit status “disclaimed.” This status, which is the worst status a county can receive, could have hindered the county’s ability to receive bonds, grants, and other funds from the state. Luckily, after Chaffins remedied a remarkable amount of issues, the state agreed, at the request of Starke County Attorney Martin Lucas, to change the audit status to “unqualified,” which is the best status a county undergoing audit issues can receive.
A corrective action plan,which was drafted by Lucas, was also reviewed during the meeting. The plan stated the commissioners would determine whether or not the treasurer was responsible for these errors. If she was found to be delinquent, a motion would be voted on for her removal. That plan was implemented at an emergency meeting of commissioners in August. Belork has the right to appeal. If she is permanently removed, a review of the records will be conducted to get everything in order.
Belork, who was aware of the state's findings last month, gave a written statement to the state auditors to explain what she believes caused the errors. She said one of her main problems was a rollover in staff: In 2010. Belork said she had five different people working in the position responsible for doing the daily cash balance sheets. She went on to say that not only did she undergo several staff changes in 2010, but the balances were being tracked by pen and paper and she only recently became aware of an electronic method of maintaining these balances. At the time the audit was conducted, Belork told the state she was aware of the program, had the proper clearance and formulas to run it, and things were going well. Although the audit uncovered bookkeeping errors that totaled in the hundreds of thousands, Belork claimed the errors were due to a lack of cooperation between her office and the offices of the auditor and county commissioners.

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