Yesterday, I started a series about the Grafton Township audit by Eder, Casella & Company on outgoing Township Assessor John Rossi’s last year in office.
Astonishingly, the firm sent it to his successor, Linda Moore, and asked her to sign off on the audit as being “correct.”
Maybe this is routine practice brought on by auditors having been sued, but expecting a replacement official to approve her predecessor’s bookkeeping strikes me as really strange, especially when “material weaknesses” were found in internal control.
The $10,000 audit will be considered at tonight’s meeting at the Huntley Park District building at 7:30.
But, we’re only halfway through the first page of the transmittal letter.
“We believe the following deficiencies constitute material weaknesses,”
the missive continues.
First up are “Financial Statement Adjustments.”
“Management is responsible for the accuracy and completeness of all financial records,” the firm of Certified Public Accountants state.”
In a long paragraph this sentence leaps out,
“During the course of our audit, material misstatements of financial records were found, resulting in adjusting entries…Management agreed with the adjustments and they were included in the 2009 financial statements.”
No mention as to the identity of “management” was included in the transmittal letter.
Next on the list is the lack of a “Policies and Procedures Manual.” That’s pretty much what I found when I became McHenry County Treasurer. Memory of the office’s employees was the location of our manual.
What’s such a manual supposed to contain?
“…enough detail that another person could fulfill the requirements of a particular process by following the explanations.”
“Account Reconciliations…were not apparently reconciled to the actual balances.” The firm recommends that be done on a monthly basis. Sounds like Huntley School District 158 in times past.
“Expenditure Posting” brought the comment, “General Assistance Fund reported expenses that were not specific to that fund, including capital outlay expenses for the Town Fund.”
In other words, expenses were paid for the proposed new township hall out of funds that were supposed to go to help the poor.
Under “Internal Control Recommendations” the comment is made that turns up often in small operations about the same people receiving the money, writing the checks and reconciling the bank accounts.
But, the most significant seems to be
“Disbursements do not have proper documentation, for example, supporting invoices.”
And,
“Purchase orders are not used and only verb al approval is required to generate a purchase.”
And,
“Check sequence is is not consistently reviewed.”
And,
“Procedures to categorize expenditures are not in place.”
“Ineffective” is the adjective the CPA’s use to describe township controls regarding disbursements.
Finally, there’s a comment about the Grafton Food Pantry:
“Activity of the Grafton Food Pantry has not been reported in the financial statements…because it does not qualify as a component unit.”
In a letter from Moore to the auditing firm the following appears:
“There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements except the lack of documentation for the money transferred by phone to the food pantry.”
The part in bold face type was added by Moore to the suggested language from the audit firm in a letter verifying records.
More coming.
Cal, I’d really like to know why you hate District 158 so much. In two totally unrelated articles, you throw little barbs at the district. You wrote a three part article about something you call a cover-up AFTER it was resolved at a public meeting, and this doesn’t even touch the dozens if not hundreds of pointed comments you’ve made in the past.
Why do you hate District 158 so much?
What Grafton Township has done is provided my family food, my daughter a coat, our family Holiday meals, a Christmas tree and a warm caring atmosphere. We should be thanking them for all of their help to 100’s of families rather than critiquing their every move.
Thank you Grafton Food Pantry and John Rossi for all of your help…
Kim & Family
The village of McCullom lake also have Eder, Casella & Company doing the village Audit. And the report sounds the same as the one above. But the trustees only recieve 2 pages of thr report. Irequested the whole report from casella, because the village presedent stated the trustees recieved the same thing she recieve. Cassella refused to give me the whole report.
in 08 the report stated that the trustee`s should be concerned about 300,000 that was barrowed from the sewer fund several years ago and nothing has been paid back. HERE ispart of the minutes from the meeting.
Trustee Matthesius asked if we needed to do anything about the Eder, Casella letter. President Hansen said that Eder, Casella took it upon themselves four years ago to put the million-dollar bond issue funds in our Sewer account. By doing that they made our general fund look as if a negative balance exists. The funds were in a separate account under the General fund to be used for Capitol Development Fees only. They have twelve (12) new account standards and want written procedures on accounting entries. These are checks and balances. Trustee Schlitter asked about the $300,000 that has been outstanding for several years. President Hansen stated that this is what happened when Eder, Casella moved it. President Hansen had asked them to fix it, and they replied that it would wash itself out. This amount fluctuates and she does not know what the exact amount is at this time. when I went to casellas office they wouldn`t talk to me about what the Pres said until I told them I was going higher up the ladder, then they stated that it happens in all the small towns.