LISBON - Wellsville's fiscal officer inadvertently used village funds to pay a debt owed by Washingtonville, where he also serves as village fiscal officer.
The finding for recovery in the amount of $2,435, which has since been repaid to Wellsville, was among 12 non-compliance citations issued against the village as a result of a recent state audit of Wellsville's books.
The routine audit was for 2010 and 2011, and during the course of the review state auditors discovered that Wellsville Fiscal Officer Dale Davis used village funds to pay a $2,435 debt owed by Washingtonville to the Ohio Public Works Commission.
The illegal transaction resulted in a finding for recovery in the amount of $2,435 against Davis in his capacity as Washingtonville fiscal officer. According to the audit report released on May 24, the money was repaid to Wellsville by Washingtonville on Feb. 12.
Mike Maurer, a spokesman for the state auditor's office, said the transaction was deemed an honest mistake. It turns out both villages separately borrowed money through the Ohio Public Works Commission program, and Davis thought he was making Wellsville's loan payment when the actually paying Washingtonville's.
"It's believe this was not a case of malfeasance but a mistake," he said.
The other 11 citations issued against Wellsville were listed in the audit report and an accompanying management letter. These citations were mostly of bookkeeping procedures the state says were not followed, and ranged from the routine to the more serious.
For example, $8,993 was transferred in 2010 from the Broadway Park Fund into the village's general fund without council approval, which isa required for inter-fund transfers. An adjustment was made later to return the money to Broadway Park Fund.
Wellsville also failed to follow bidding procedures when it awarded a contract to a company by the name of LSW to install a new bear trap for the storm sewer system. State law requires formal bids be sought for any contract expenditure that exceeds $25,000, and the no-bid contract awarded LSW was for $37,908.
"This could lead to payments being made at higher prices than would be obtained if the contract would have gone out for competitive bidding," wrote state Auditor David Yost.
Wellsville was also cited for failing to properly maintain the record of council meetings in the official council book. According to the audit, "pages were not numbered, financial statements and reconciliations were not approved, and bills were not noted as being approved for payment by Council at each meeting. The resolutions and ordinances were not maintained in a permanent book with an index .... This situation could increase the risk that the village may not approve all pertinent information."
The following are some of the other citations included in Wellsville's state audit:
- Failed to obtain council approval when creating new funds to deposit federal COPS grant money and JAG money.
- Allowed spending to exceed budget appropriations in numerous funds.
- Approximately $493 in late fees were incurred, "caused by the village not paying the bills within the time frame allowed by the vendor. In some instances, the bills were paid six months late."
- In a test of 32 purchase orders, seven were not signed by Davis. Policy requires they be signed in advance by the fiscal officer and mayor to certify the funds exist to cover the expense.
- There was a $20,018 automatic transfer from the village's bank account in December 2011 to Coventry Health & Life Insurance without it being posted on the book until two months later. This resulted in village expenditures "to be understated for the year and possible illegal funds funding the expenditures." The fiscal officer was told to post transactions when they occur.
- A test of 32 expenditures found that 19 lacked the proper paperwork showing money had been set aside to cover it. "Incurring obligations prior to the fiscal officer's certification could result in the village spending more than appropriated," Yost said.