St James Township Meeting with Auditors

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BobTidmore
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St James Township Meeting with Auditors

Post by BobTidmore »

I understand the Township will have a workshop with the auditors this Friday at 10:00 AM and it is a public meeting. Here is the link to the audit and I suggest the all of us take good look at the letter and audit data. Since this is a public meeting I would assume the auditors will take questions.

https://treas-secure.state.mi.us/LAFDoc ... c_code=AUD

Bob Tidmore
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Beaver Island, MI
sbsp
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Post by sbsp »

In review of the St. James Township Audit for March 31, 2014, several questions jumped out at me which someone should question at the public audit meeting on Friday at 10:00am.
Going to the end of the audit report and working backwards, these are questions for which the public should be informed:

1) On page 2, of the letter to the board at the end of the audit, Credit Card Documentation, it states: "During the test of expense transactions, it was noted that invoices were missing to support charges to the credit card". My questions would be who is authorized to use the credit card? What were the amounts of unsupported charges? Where and when were the charges made? Did the audit or board reconcile any of the noted issues?

2) On page 30, Pension Plan. Retirement contribution is 5% of compensated wages which would be a total of approx. $2,729, yet $3,692, was paid. My question would be the additional $963, why the over payment and where or to whom can the township account for the money expenditure overage?

3) On page 26, Federal Deposit Insurance. It would appear that $296,413 of tax revenues were deposited as uninsured by the FDIC and uncollateralized. My question is, was almost $300,000 of our money at risk in a climate that just went through the collapse of several major banks and financial institutions?

I don't want to overwhelm the public with questions but I'm sure I will have several more that should be addressed and answered on Friday. I would gladly lead the charge but will not be able to attend the meeting. Hopefully some who share my concerns will address these to the board and auditors so we can get some answers on the record.

Kirk
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Post by sbsp »

In the interest of time for Friday's audit/township meeting I would suggest you call the township supervisor today during office hours and request a hard copy of the audit. Glance through the audit and make notes/questions in the margin that you can take to Friday's meeting or the next township meeting to pose questions.
Someone on the Island might be able to send you electronically a copy of the audit, mine is hard copy.
NOTE:
At the end of the audit there are 10 pages of reconciliation discrepancies, reclassifications, adjustments, reverses, allocation class corrections and cash corrections amounting to thousands of our tax dollars. To me, this seems excessive for any authority handling our money. If I were to handle my personal finances in this manner, I would either be broke, spending hours explaining it to the IRS or viewing life through thin vertical steel columns.

Kirk
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Post by Gillespie »

I have been asking for records from the township since late October. There were numerous FOIA (Freedom of Information Act) violations. What should have been a simple process became very protracted and time consuming. The records I asked for should be routine and of record on any given day. It appears that there are many incomplete records whether they be transactions, credit card usage with no supporting invoice or explanation, checks written with no proper record and on and on.

Following are a few comments and questions to that end:

I have been thinking of this for a bit now. The problems are so big I don't think some folks realize just how big. The townships own auditor says the following in the document posted on this thread:

"deficiency in internal control"

"invoices were missing to support charges to the credit card"

Deficit in two accounts - violation of state statute

Recommend annual audits because bi-annual are not enough

"separate ledgers for each individual fund"

"policies for [1] investments [2] privacy [3]electronic transfers [4] conflict of interest [5] fixed asset [6] sewer usage fees and penalties [7] credit card use"

"income and receivables in the sewer fund are not being properly recorded"

"take action to collect delinquent receivables"

Township auditors state "management have limited technical expertise." Does the current board have the technical expertise to fix the above 8 items?

Does the current board have the expertise to come up with a long term plan to stop this from happening again?

Is outside oversight required here which would cost us all a ton of money?

This should tell you all why the township website has not been updated in some time.

Kirk is correct, there should be hard copies of the audit ready to provide to anyone who would like one in advance of this very important meeting. Township Supervisors office number is 231-448-2014.

The audit is dated March 31, 2014, the auditors cover letter is dated November 14, 2014. As near as I can figure the audit was not delivered to the township until the last day of 2014. I would call that highly irregular for something that should be done within 60 days of the financial report (logically). The auditor should have an appropriate answer for this. This is all about protecting the rights of taxpaying citizens.

These questions should be posed to the township board in case no one from same should be reading the forum. It strikes pretty hard that the chamber director vilified the forum for years when people were challenging the township to answer questions that started out as reasonable and became contentious, "Shut down the forum", "Block" (this guy or that guy), "Delete his post" and on and on. Shame. Perhaps these peoples comments and questions, yes things could get out of hand, but it is understandable when the answers were not given.

There are many questions and many more that could come up. Something is just not right here.
sbsp
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Post by sbsp »

Someone contacted with a PM today and I shared with them that our current situation is like our leaders driving all of us on the Island to the poorhouse in our car that we purchased and using our credit card for gas. Wake up folks, we are about two blocks from the front door of that poorhouse going 45mph in a 25 zone. It's time we yell, "stop", and let our leaders out so someone from the Michigan Emergency Manager Law can take over at the wheel and get us on the road to financial recovery before we hit the poorhouse or worse, drive off the cliff of no return.

Kirk
sbsp
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Post by sbsp »

For a good time on Friday, attend the St. James Township open meeting with the auditors. If you want to see the township board break out the confetti and party hats, ask them who/what caused the primary freeze-up of the sewer system. There were secondary freezes due to lack of flow but what was the primary reason for the freeze causing the township to pay $50,000 - $60,000, to repair?

Kirk
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Post by Gillespie »

When we insulated the line under the driveway at the resale shop in December the frost was already down 16". Keeping that plowed with cars driving over it would certainly drive the frost down quickly. We were very surprised at how deep it had gotten so soon. The top of the pipe is 42" through that area basically which is typically the frost line (burial) for a home footing bottom (base). It seems obvious that it started there
sbsp
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Post by sbsp »

Richie -
Thanks for the clarification, truth trumps rumors. It just appears to me that the whole sewer project has had questionable financial oversight from the beginning. I hope that it will not be a drain, pun intended, on township dollars moving forward.

Kirk
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Post by Gillespie »

Comments and questions are being accumulated from the video of the township meeting yesterday. The information will be posted here when it becomes available. Thank you!
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Post by Gillespie »

Following are some of the comments from one citizen regarding the audit meeting, more to follow.

Before that I have a big question, WHY was our Operating, Airport and Transfer Station millage not renewed during the regular general election? Why would this be offered up during a special meeting with the auditor? Very strange.

Here are the other comments from earlier this morning:

St. James Board meeting with the Auditors explaining the financial statements to the Township Board. Based upon the questions asked by the Board, it appears that the newest Board member asked the most penetrating questions and exhibited the most concern over accurate and effective financial management by the Board.
The meeting was quite uneventful based upon expectations and discussions on the Forum. However, a number of important issues were raised by the Auditors during their explanation of the information contained in the audit report. From an accountants standpoint, the audit was quite devastating in its criticism and recommended changes. These include the following:
Failure to use separate general ledgers for each fund
Failure to maintain adequate and accurate ledger and sub-ledger accounts in balance
Failure to bill users of the Sewer System accurately and apparently including non-billing
Manner in which the records were maintained reflected lack of skill and personnel to handle
Sewer System accounting responsibilities - Recommendation of Auditors - Ship out or get qualified and adequate personnel to do the job
Improve credit card spending and documentation controls
Auditors reviewed with Board the State of Michigan Audit Report check list for compliance with State financial reporting requirements
Criticism by the Auditors of the Board's expenditures exceeding the authorized budget amounts in two of the Township funds - This criticism would have been avoided by merely modifying the prior budget before year end.
The Auditors spoke of an annual budget allocated on a monthly basis for revenues and expenditures.
The discussion between the Auditors and the Board indicated a total lack of understanding of the budget, tax collection and spending cycle of the Township. They did not indicate any awareness that the total real property taxes for the fiscal year beginning April 1st would be collected in early April and were to be used to provide operating funds thru March 31st of the following year.
The transfer of money between various Township funds was significant. The propriety of transferring money from a fund directly supported by a specific millage for a specific purpose to another fund should be investigated. Such transfers defeat the will of the taxpayers that the funds be spent for the purpose indicated in the authorizing millage.
The audit of the Sewer System Fund is continuing and according to Bill Haggard will be completed soon. This audit is to be completed by a different accounting firm. The two accounting firms have exchanged information as they worked on their respective audits.
The Mason Kamermann Rohrbach accounting firm indicated their audit was delayed because of the other Sewer audit.
FROM WHAT KITTY MCNAMARA SAID, THE FRIDAY MEETING MAY HAVE BEEN THE RESULT OF A CALL FROM THE STATE TO THE ST. JAMES BOARD.

(Please post your comments and questions, thank you!)
Gillespie
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Post by Gillespie »

Ms. McNamara called this morning and strongly refuted the last comment in the above post that the State may have called or pushed the meeting that was held. The meeting was called for by the full board with the auditor. The writer might have heard the auditor comment that she has to get information in to the State.

To say the least there will be misinterpretations of comments and such going forward. Apologies for that.
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Post by Gillespie »

A note to keep you all up to date. There is a lot of interest in this topic with many conversations being held. Make no mistake about it, there are very serious issues ongoing here. Those of us who have an interest in getting to the bottom of this want to be absolutely certain the facts are correct. The State Treasurers Office has been contacted by at least one party. This is not a mistake, there are big issues here. Stay tuned!
Campbell60tr34@aol.com
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Audit

Post by Campbell60tr34@aol.com »

Jim Campbell
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computer?

Post by duffer »

just wondering what was on that computer that had to be crushed at the transfer station if were asking these kinds of questions. simple and hope this can get worked out. don't want people to shy away from here as home owners because our government is worse than washington dc. glad to see all these folks getting to the bottom of these long term woes.
duffy
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Post by sbsp »

Duffer -
Unfortunately I'm not sure we are getting to the bottom of our woes and won't do so until our local government admits to problems and pledges to fix them with input from the public. Hate to see people shy away from Beaver Island but my advise to outsiders is, stay tuned but stay clear until things get fixed.

Kirk
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