SAUK VILLAGE | Pride
and Progress may be the Village’s motto but when it comes to the finances of
Sauk Village, there’s not much to be proud of nor clearly has there been any
progress. Mayor David Hanks and his
administration have failed to address over 19 serious issues with the Village’s
audit, most of which are repeated from the prior year according to the audit
report.
The following are a few items that were found in the Village’s annual audit report:
3.
Journal Entries (Repeated from Prior Year)
The Finance
Director (Mohan Rao) initiates and records substantially all manual journal
entries, without formal independent review.
This lack of review increases the risk that fraudulent financial
reporting, or a misappropriation, could occur and remain undetected. Although the Board of Trustees reviews the
monthly financial data, we recommend that another individual with financial
expertise and knowledge of the Village’s chart of accounts review and initiate
each manual adjustment that is identified and posted by the Finance Director.
4.
Wire Transfers (Repeated from Prior Year)
The Finance
Director (Mohan Rao) initiates and records substantially all wire transfers,
without formal independent review. This
lack of review increases the risk that a misappropriation of Village funds
could occur and remain undetected.
We recommend that another individual with financial expertise review and
initial each wire transfer advice.
Additionally, automatic notification should be sent by the bank to a
responsible individual other than the Finance Director.
5.
Working Cash Fund (Repeated from Prior Year)
The
Working Cash Fund has made interfund loans to the General Fund, and those loans
have not been repaid in accordance with State Statutes. Under 65 ILCS 5/8-7, the Village is permitted
to transfer all or part of the Working Cash Fund to the General Fund in
anticipation of the collection of taxes levied for general or special corporate
purposes; however, the Working Cash Fund is to be reimbursed within a certain
period of time as specified in the Statutes.
The statutes further provide for the abolishment of the Working Cash
Fund by resolution of the Village Board, whereupon the Fund may be transferred to
the General Fund, at the end of the fiscal year; however, a municipality that
has abolished the working cash fund may not establish another working cash fund
for four years, after the date the fund was abolished. Additionally, any general obligation bonds
that were previously issued for working cash purposes must be retired before a
municipality may establish a new working cash fund.
Presently, the
Village is recording property taxes, levied for purposes of payment of
principal and interest on the Working Cash Bonds, to the Working Cash Fund, and
in turn making a transfer to the Debt Service Fund. We recommend that the Village set up
transactions to be recorded in the proper fund.
Nothing has been done to correct these
Material Weakness from the prior year’s audit report, and we see what the lack of
oversight of taxpayers’ dollars can clearly result in another scandal just like with the Village Treasurer.
An expert on Illinois Municipal
Finance, intimately familiar with Sauk Village’s financial history reviewed the
Village’s audit and management letter and stated the following: “I don't believe any of these
are just normal issues. In a well run environment, none of these issues
should occur. There should always be a system of "double-check"
in order to eliminate any possibility of wrongdoing. We have many of
these safeguards in place to prevent fraud and provide transparency with
taxpayer’s money. What I don't get
is the lack of attention being paid to account receivables. What exactly
does everyone working at Village Hall do? Why is it that the Finance
Director has no backup from existing staff? What does this so called Village
Administrator or the Mayor do? (by the way the Finance Director seems to have a lot of authority according to
this report)? This report is pathetic!”
No comments:
Post a Comment