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Tuesday, February 10, 2015

Preliminary investigation finds $41,000 missing in one City division

Plainfield resident and PMUA employee Kim Montford opened Pandora's box at City Council on Monday evening by asking Council President Bridget Rivers if she was aware of whether a forensic audit is being conducted by the Mapp administration.

Pressed by Rivers, Administration & Finance Director Ron West drew a distinction between the resolution put forward on Monday for $60,000 to fund a forensic audit, and the special investigation which is under way and has already uncovered $41,000 in missing cash from one division for one year (2010). David Rutherford captured some of the discussion on video (see here).

Forensic audits differ from the annual audit of the books.

In the city's annual audit, an outside auditing firm looks to see that the City's books are being properly kept and in balance. While that audit does examine the City's fiscal procedures and policies, it is concerned primarily with whether things are done as they are supposed to be done. Among the perennial issues in Plainfield have been failure to deposit cash on time, purchases circumventing the purchasing procedures, and sloppy record-keeping.

A forensic audit, on the other hand, takes a detailed look at transactions in order to determine whether or not there has been any fraud, waste or abuse.

One example would be the filching of cash by employees. The potential for fraud and theft arises when persons who pay fees in cash are given a receipt, but that transaction is not recorded by the employee on the City's books. In the past there have been suspicious activities around missing cash in the Health Division, the Tax Collector's office, and the Recreation Division.

A forensic audit would go deeply into not only these kinds of transactions, but also such things are whether fraud occurred in the awarding of contracts by "kickbacks" of one sort or another. Councilor Williams pointed out that she had personally uncovered a scheme of fraudulent "permits" for July 4 Parade vendors.

The Mapp administration has twice previously sought an appropriation for a forensic audit, but the proposals were rebuffed by a Council majority. Some, like former Councilor Bill Reid, argued a "let bygones be bygones" attitude, others have not explained their reasons for objecting to a forensic audit.

Now, however, the Mapp administration may have put the Council in a corner. Mayor Mapp stated on Monday that not only was the missing $41,000 discovered, the Administration was prepared to forward the findings to the proper authorities. Even so, a Council majority on Monday refused to take up the proposed resolution to hire a forensic auditor.

If the Mapp administration turns the matter over to the county prosecutor, that may give some Council members pause. If a criminal prosecution is brought for theft or theft by deception, the question of whether or not any councilors have been in conversation with an accused party to delay, obstruct or prevent the investigation of a crime would open the door to possible charges of conspiracy.

Who would want that?

Is it time for the Council to get real about cleaning up Plainfield's fiscal act?

What do you think?

  -- Dan Damon [follow]

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Tom Kaercher said...

I encourage the Administration to forward any suspicious information on the appropriate authorities for action. Misuse of taxpayer money is a serious issue and it should be dealt with seriously.

I thought Council President Rivers made an excellent suggestion about the forensic audit, namely that it should go back 20 years. She makes a very good point. Certainly Plainfield's financial irregularities didn't only happen over the past 10 years. As a taxpayer I'd like to know where the issues were in the past so the City can take measures so they don't happen again in the future. And at a cost of $30,000 to $60,000 the forensic audit would cost less than one tenth of one percent of the City budget, which is a bargain. I am confident the savings from closing financial loopholes will more than recoup the costs. I hope the Administration and the rest of the Council embrace Ms. Rivers' lead on a 20 year forensic audit.

Tom Kaercher