State Auditor's office finds $300,000 discrepancy in Richmond Heights financial records
Published: Thursday, February 23, 2012, 1:05 PM
RICHMOND HTS. - Accountants from the state Auditor’s office have discovered a $300,000 discrepancy in the city’s financial records.
The accountants, hired by the city to reconcile its financial records from January 2009 to November 2011, reported to City Council (Tuesday) Feb. 21 a $391,000 property tax double entry, which when combined with all other adjustments amounted to a $328,000 discrepancy.
The long expected reconciliation report, which Tisha Turner of the Auditor’s office presented at an Audit Committee meeting, was comforting to some listeners and disturbing to others.
"I cannot fathom making a $300,000 double booking," Councilman Russell Johnson said. "Three to four people had to handle the checks, and that amount had to stand out in your mind . . . it would stand out in my mind."
"This is very illuminating, and I am working hard at not getting disturbed by what I’ve heard," resident Trisha Ackerman said.
Mayor Daniel Ursu said the error considered against the entire budget amount was 2 percent and finding all errors now would allow the city to correct errors quickly going forward. Councilman Mark Alexander, former head of the finance committee, said except for the huge double entry, the total of all other adjustments, about $68,000, was modest.
Councilwoman Miesha Headen, who chairs the audit committee, said Ursu made a good point about going forward.
"If we had not done this now, we would not have known (about this error) for another 12 months," she said.
Headen said the finance department had made fewer and fewer errors as the outside accountants worked, and they could now reduce cumulative errors.
Finance director Lynda Rossiter told the <em>Sun Messenger</em> she found the source of the error and it "was not intentional."
The property tax was part of a group of entries which did not process technically and which staff thought they had deleted. So they entered it into another group, but the first entry processed after all, she said. Rossiter said a second outside group is completing an audit soon that will pinpoint the problem.
Council asked the state accountants what information they should be looking at every month. The accountants said cash position, bank reconciliation, appropriations, and revenue and expenditure reports to check whether they coincide by percentage with where the budget should be.
Headen said according to the city charter, monthly financial statements are to be given to council within four weeks.
Councilman Don O’Toole, who chairs the finance committee, said he is committed to having reconciled financial reports by the third Tuesday of every month.
"Once you get all the hiccups out of the system, it should not be that difficult," he said, adding he has a verbal commitment from Rossiter to do it.
As part of recommended financial clean-ups, Headen has also been looking at four policies: cell phones, approved last October; credit cards, approved Feb. 7; travel policy, which is still to come; and use of city vehicles, which she was ready to discuss Feb. 21.
She said she had identified two vehicles being used by city employees who do not meet the criteria used by Euclid and Highland Heights, which is that the employee is on call 24 hours a day. The cost of such use is approximately $5,000 a year, Headen said.
Johnson said such use by one employee was egregious because the employee lives out of the county. He told a resident in the hall after the meeting that employee was Dan Spada, assistant development director.
Look for more coverage of this issue in the March 1 edition of the Sun Messenger and online at cleveland.com/richmond-heights.
