After completing a regular audit, the Ohio Auditor of State’s office issued a “Finding of Recovery for public monies illegally expended” totaling $2,586 to Orange Township’s former fiscal officer, Joel Spitzer, and his bond company, Selective Insurance Company of America, for late fees incurred for late payment of invoices.
The request for the audit came from current Orange Township Fiscal Officer Wes Mayer, who was appointed Sept. 19, 2018.
“I requested the audit,” Mayer said. “After being sworn in, I wanted to know what I was responsible for and what he was responsible for.
“I worked really close with these auditors. We sat down and talked about the needed changes and most of the concerns, ” he added.
Mayer said that most of the auditor’s concerns centered around having good controls in place.
“Lack or failure of controls over financial reporting can result in errors and irregularities that could go undetected and decrease the reliability of financial data,” states the auditor’s report released to the public Nov. 7.
“The former fiscal office was three months behind in the payment of most obligations and five months behind in completed bank reconciliations. It was quickly evident that financial reporting to the (Orange Township) Board of Trustees was not being done effectively and not in a timely manner,” states the auditor’s report.
According to Mayer, the report was presented to township trustees early in October. He said he was told by the auditor’s office that according to Ohio Revised Code, the public release of the report couldn’t happen within a month before an election but would be released after the Nov. 5 election.
Other findings in the auditor’s report include:
• A material weakness in financial reporting.
“Due to a lack of internal controls in place to help ensure receipts, expenditures, and fund balances are properly classified …” states the report.
Mayer said things were not recorded properly, adding the board had set up individual funds for the various projects in the township without getting permission from the state auditor’s office.
“We’ve closed the funds and moved the money to the general fund,” he added.
• A material weakness and material noncompliance in the recording of “On-Behalf Grants.”
“The Township did not record the fiscal year 2018 revenues and related expenditures for an on-behalf-of grant in the amount of $149,903 for the Bale-Kenyon improvement project which passed through Ohio Public Works Commission (OPWC),” states the report.
Mayer said normally, grants are paid directly to the contractor and the township records it, but the OPWC grant wasn’t.
“It seems to be a fairly common mistake in townships,” he said.
• A significant deficiency in the timely recording of cash collections.
“Due to negligence of the former fiscal officer, 2018 receipts were often not recorded to the accounting system for weeks to months after the receipts were deposited in the township’s bank accounts,” states the report.
Mayer said the 2018 receipts were from admittance fees and selling concessions at the township’s pool in the summer.
“The swimming pool causes us to have more transactions than any other township,” he said. “We’ve tightened the controls.”
• A significant deficiency in the monthly performance of bank-to-book reconciliations.
“The township did perform bank-to-book reconciliations throughout fiscal year 2018; however, reconciliations were not performed timely or on a monthly basis,” states the report.
Mayer said the township was “way behind” in performing bank-to-book reconciliations.
“We’ve been a little slower than we would like to be,” he said. “That’s because of the lack of prior reconciliation.”
• A significant deficiency in financial oversight.
“During our evaluation of the board of trustee meetings minutes, it was not documented the board received financial reports to evaluate township activity for the months of January through July 2018. The township fiscal officer did not present financial information to the board of trustees during fiscal year 2018 until the Aug. 6, 2018 board meeting,” states the report.
Mayer said the fiscal office simply did not get the reports to the board in a timely manner.
• A significant deficiency and material noncompliance in reporting on the township’s self-insurance plan
“Ohio Rev. Code … states the self-insurance program shall include a contract with a certified public accountant and a member of the American Academy of Actuaries for the preparation of the written evaluations required under division (C)(1),” states the report.
Mayer said the insurance provider to the township was supposed to provide a certified public accountant who was a member of the American Academy of Actuaries, but it never did.
“The problem was the insurance company,” he said. “We no longer use them.”
However, Mayer said that he didn’t find any direct abuse of the fiscal office by Spitzer and that he only found “incompetence and the lack of oversight.”
“Joel couldn’t have stolen money from the township, because he didn’t know how to get into the state accounting system,” Mayer said. “It was only after his assistant Patti Lewis left that he had to learn how to use it.”
The Gazette reached out to Spitzer for comment on the finding for recovery.
“For 10 years, the fiscal office has never received even the slightest of derogatory remarks on an audit,” Spitzer said. “I paid all the bills in the course and role of employment. Late fees were incurred by refusal of trustees to timely sign checks, and the process of verifying all expenditures on credit cards for government purpose is untimely to avoid late fees.”
Spitzer said his sudden resignation in September 2018 was prompted by the board of trustees creating “an atmosphere that left a $30 million budget without any support staff by reducing appropriations for support staff to zero.”
“I resigned because I did not receive any support from the board,” he added.
To view the Ohio Auditor of State’s report, go to https://www.ohioauditor.gov/auditsearch/Reports/2019/Orange_Township_18-Delaware.pdf.