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Checks and balances eyed over local budgets
(by Joan Demirjian - June 30, 2010)
Checks and balances eyed over local budgets
By JOAN DEMIRJIAN
Multiple sets of eyes overseeing community budgets are needed for extra security, according to local officials.
That awareness has heightened since the incident in Chester Township in which former township Clerk Michael Spellman was sentenced in 2003 for the theft of $4.3 million from the township's coffers.
Bainbridge Township Trustees have talked recently of an audit committee for checks and balances.
"I'm not opposed to an audit committee," Trustee Matt Lynch said. "Several years ago, one was formed, but it ceased to function," he said. "I am hopeful we have safeguards in place to prevent abuse, but an audit committee could provide additional security."
Bainbridge Trustee Jeff Markley also said the audit committee was never fully activated. An audit committee is supposed to review financial reports, he said.
If the township decides to activate an audit committee, trustees will follow "to the letter of the law what the state auditor says," Mr. Markley said.
A representative of the state is to be present at the July 12 Township Trustees meeting to make a presentation on performance audit.
In such an audit, an evaluation of efficiencies in the township would be done, including finances, Mr. Markley said. And if a better structure for managing the township's general fund is recommended, that would be good, he said.
A financial audit committee might be recommended. Such a committee could be a good idea if it's recommended by the state auditor, Mr. Lynch said.
For its size, neighboring South Russell Village does more than many communities to make sure there are many checks and balances over its finances.
Councilman Jack Binder said the village has a good system in place with a finance committee overseeing bank statements and the fiscal auditor's report. The village has a budget of about $2.7 million.
There isn't just one person in control, Mr. Binder said. There are the fiscal officer, fiscal auditor and the finance committee sharing the burden, he said.
"We review the monthly bank statements and copies of our fiscal auditor's report," Mr. Binder said.
"Our finance committee serves a lot of different functions," Mr. Binder said. The committee receives copies of bank statements, showing balances.
The fiscal officer has to balance with the fiscal auditor, he said.
The system has been in place for three years, Mr. Binder said. The village eliminated the position of village clerk, an elected person, to fiscal officer, appointed by the mayor and confirmed by council. It gives more control over that position, he said.
And the fiscal auditor also is appointed by the mayor and serves as a treasurer, Mr. Binder said.
South Russell Mayor Matt Brett said the village has four levels of controls. A state auditor checks the books every other year, and the fiscal officer and fiscal auditor oversee them.
The fiscal officer presents reports monthly on expenditures and revenues for the period and year to date.
Then there is the finance committee, including Councilmen Jack Binder and John Dishong, looking over expenditures and revenues on a regular basis.
Lastly, the mayor and council approve all bills and the operating budgets of all the departments. "We go over them line by line," Mr. Brett said.
"Sometimes we wrestle over spending $50, but council gets a deep understanding of the village budgets," Mr. Brett said. "We spend a fair amount of time on checks and balances."
The incident in Chester helped trigger processes to make sure the village is doing all things required, he said. "We wanted a system where everyone is accountable."
Russell Trustee James Dickinson said the township's committee is comprised of the three trustees.
Relatively few townships have audit committees made up of other than trustees, he said.
"We go over the audit report, and we look over statements and cash balances," Mr. Dickinson said. "We want to see cash balances. It's part of our duties as trustees."
A state audit is done every two years. A representative of the state auditor's office goes over the audit with trustees in a post-audit report, he said.
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