CPA’s Jeffrey Rollefson and Paul Thermen present their draft audit to the Grafton Township Board minus Trustee Gerry McMahon.
Because of the legal wrangling, the audit that should have been ready last summer has just been completed in draft form.
Still holding up finalization is the lack of a reply to a routine letter sent all law firms who represented Grafton Township. Ancel, Glink’s reply is the only one missing.
Receipt of that reply, plus the signing of a “representation letter” by the proper township authority are the big things in the way of a final report.
Evans, Marshall & Pease, P.C., is the firm that took on the task of auditing Grafton Township.
Paul Thermen and Jeffery Rollefson were the pointmen who came to a special township board meeting Thursday night to present their draft findings and answer questions.
Just as they were getting started, Township Trustee Gerry McMahon walked out. He stayed only twelve minutes.
My understanding is that Trustees get $100 a meeting.
CPA aul Theremen answers Trustee Robert LaPorta’s questions as Supervisor Linda Moore listens.
So, what did the auditors find?
“Nothing was missing,” Thermen explained in answer to a question from Trustee Rob LaPorta about the transfer of large amounts of money between township bank accounts.
Where there big problems?
“We really found nothing untoward in the audit,” Thermen said.
He complained about the “laborious” effort it took to read the minute and review the legal fees, but said the financial portions of the audit “went as smoothly as could be expected.”
LaPorta led the questioning on the Trustees’ behalf. He wanted to know if the detailed questions raised by multiple township officials had been investigated.
Theremen wondered if some of the questions had not been handed in the courtroom.
“Procedures were a matter of differences of opinion. Given the large legal expenditures, frankly, very bluntly, (the size) blew my mind, some of these concerns must have been handled by some of of these attorneys.”
“We must utilize ‘professional skepticism,’” he added. He said the firm had solicited documents “relative to fraud.”
Grafton Township Trustee Robert LaPorta dominated the questioning of the outside auditors.
LaPorta interjected he agreed the township had had “astronomically large attorney fees” and observed that “some are still open,” but said the concerns brought up by various Grafton Township officials needed to be addressed in “the management letter, especially because of the extensive number of pages of concerns.”
“In all bluntness, I found some of it to be more politically oriented that accounting,” Thermen replied. “In no way do we look at every single transaction…We didn’t see anything glaring.”
The CPA mentioned a complaint about allocation of a $5 expenditure to an unnamed official. He used the word “minutia.”
LaPorta asked about “adjusting entries.”
“It did not affect the financial reporting,” Thermen replied.
“It is not uncommon to see adjusting entries. (They are) not an indication of something done wrong.”
Indicating that the audit might end up in court, LaPorta pointed asked if the firm kept work papers.
They do for five years.
Paul Thermen, CPA
There was much conversation flowing from a draft note on “Contingencies.”
Its subject was the Grafton Township Food Pantry, moved out of township offices last year.
The basic question, raised by at least one attorney in the past, was whether the Township Board has taken official action to transfer the Grafton Township Food Pantry to a not-for-profit organization or is it still a “component unit” of the Township. [Read Attorney Joe Gottermoller's September 2009 advice, including about the Food Pantry here.]
Theremen pointed out that a township employee had helped staff the Food Pantry in year’s past.
“The fact that it was housed here would lead the public to believe it was under the Township,” he added.
LaPorta agreed, “Mary was assigned to the Food Pantry.”
The auditor did not object to organization under a not-for-profit format so food could be purchased cheaper from the Northern Illinois Food Bank, he questioned whether the transferal from Township to non-Township governance had been done properly. He stressed, however, that he was not giving a legal opinion.
He pointed out that board was made up the former Supervisor, former Clerk, present Clerk and one Trustee.
“Who appointed the (Food Pantry) Board?” he asked.
Trustee Betty Zirk explained the history of the Grafton Township Foor Pantry.
“I don’t recall,” Trustee Betty Zirk replied.
“How did any of you get on the Board?” was his follow-up question.
LaPorta said that former Supervisor John Rossi acted in his capacity as a private citizen, not as Township Supervisor, when he filed the Food Pantry’s legal papers.
Thermen wondered how that was possible, if the Food Pantry was being run by the Township.
“It kind of walks like a component unit and acts like one. I think it is one. That’s my non-legal opinion.
The auditors wanted everyone to know they were talking about the FY10 “DRAFT” audit. I hope this makes that clear.
“The Board has done nothing, zip, zero,” he observed concerning the Food Pantry’s transfer to a private entity.
LaPorta noted that its finances had been run out of Supervisor Millie Ruth’s personal checking account. He added that after Rossi was elected Supervisor a separate account was set up to accept donations.
“Action needs to be taken by the Board to divest itself of the Food Pantry,” Thermen said. “It could be done. It hasn’t been done. Hence, my note.”
Trustee Barb Murphy asked if a motion were made at the next Township meeting, “do we need to go back?”
CPA Paul Thermen answers question from Trustee Rob LaPorta.
Thermen again advised to get an attorney’s advice.
LaPorta stressed that they had followed an attorney’s advice at the time.
Thermen observed that the Township “had more attorneys than anyone I can think of.”
He noted that his firm’s predecessor as auditor had also commented on the Food Pantry situation in its management letter.
The draft audit for the immediate past year is almost completed and the firm intends to write a joint management letter to address both years.