Accounting errors and thefts attributed to the former village administrator over recent years have made closing out this year’s financial books quite the chore in Mount Sterling.
And while finances may be rocky, the village is not broke, according to outgoing Fiscal Officer Cindy Miller.
She reported to village council the state of the village’s finances Monday as she gets everything squared away for 2016. The books are almost closed for the village to be ready to pay its year-end bills, but there’s still work to be done, she said.
The village’s finance troubles come from three sources: Joe Johnson’s theft from the village coffers, poor accounting practices from previous fiscal officers and oversights from previous audits.
Miller has found the whole thing an accounting nightmare. For example, checks from eight years ago had not been voided out or put into the balance sheet, and the village’s payroll was in an entirely different accounting system.
There’s another issue too, numerous accounting mistakes made over the past five years in which money was taken out of the wrong funds to pay for things. So now the village must make those adjustments as directed from the State Auditor’s office. If some funds end in the negative, the fund will have to be made whole with general fund money.
She’s had to go back for years to double check if funds were used correctly.
To make matters worse, all of the records from 2012 through 2015 are being held by the special audit team involved with the case on Johnson, the former village administrator who pleaded guilty to stealing $700,000 from the village.
Because auditors won’t give Miller a copy of the records, finding figures from this timeframe has been an uphill battle, she said. Miller has had to rely on memos from Local Government Services bureau reps, who can view the records at the auditor’s office and relay back the information. She then had to cross-check them by looking up bank records.
Auditors from LGS were in last week, and came again Tuesday for a marathon session to help finish the process, hoping to have the books completely closed. However, the auditors still must account for payroll, and likely won’t have the books fully closed until the weekend.
Mayor Lowell Anderson was frustrated with the news. He wants a direct meeting with Auditor Dave Yost to give the village’s side of things.
“They’re now covering things they should have covered in previous audits, which we paid for. Why is all of this coming out now?” he asked Monday night.
After the adjustments are made, state auditors will do an analysis on the village’s financial situation. They will determine if the village is in dire enough straits to be placed on a fiscal watch, fiscal caution or a fiscal emergency, the most severe scenario.
They may also review grant money and revoke grants if they weren’t being used properly. The auditor’s office will speak with village officials after they make a decision.
“It’s not as bad as it seems. It’s not good. But, if the auditor didn’t think we were on the right track to fixing it, they’d put someone here and I frankly wouldn’t be here,” she said.
“But the village will need to tighten their belts. If they accidentally spend too much and go into the red, the only way out is income for the village,” Miller added. “If there’s not enough to go around, they’ll have to make cuts.”
Maximilian Kwiatkowski can be reached at 740-852-1616, ext. 1617 or on Twitter @MSFKwiat