This is the fourth in a series of revelations of the 2014-15
Audit Report. The Village was delinquent
in filing their audit with the Illinois Comptroller (due December 26,
2015). The Audit report (see attached
link at the end of this report) reveals the status quo with the Village
finances continues with 3 years into David Hanks’ Administration.
SAUK VILLAGE | Why does David Hanks have Village
Administrator J.W. Fairman poking around in things better left to professionals such as the
Uniform Crime Reporting instead of the Village’s financial mess? 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.
None of these 19 items has come out
publicly, nor have they been discussed by Hanks with his Village Board.
The following are a few items that
were found in the Village’s annual audit report Management Letter:
3. Tax Increment
Financing Fund (Repeat from Prior Year)
The Village presents certain
deposits, held with the trustee/paying agent (which is Amalgamated Bank) for
the payment of principal and interest maturities on the Village’s tax increment
financing (TIF) and other general obligation bonds, and transactions associated
with those accounts, within the Debt Service Fund. As a result, it is unclear to the users
of the Village’s financial statement the extent of the balances and
transactions associated with each of the Village’s TIF Districts. We recommend that the Village consider
recording all such activity in funds that are specific to each TIF district.
4. Accounts Payable
Detail
The Village lacks an adequate
detail of accounts payable that reconciles to the general ledger balances by
fund. Various non-audit services were
required to assist the Village in preparing a detail that reconciled to the
general ledger. We recommend that the
Village consult with its account software support firm to ensure that a
detailed accounts payable report, by invoice, is available. We also recommend that the Finance Director
(Mohan Rao) review invoice posting dates to ensure that invoices are posted to
the correct accounting period.
5. Interfund Advances and Transfers (Repeated from Prior Year)
Various interfund advances and
transfers have been made, either without the
formal authorization of the Board of Trustees, or in excess of Board-approved
budgeted amounts. We
recommend that all interfund advances and transfers be brought to the Board of
Trustees for formal approval, especially in situations where actual amounts
exceed budget.
Illinois law states: 65 ILCS 5/8-1-3.1 “Borrowing from financial
institutions. The corporate authorities may borrow money for corporate purposes
from one fund for the use of another fund providing such borrowing shall be
repaid within the current fiscal year.”
Trustee Derrick Burgess during fiscal year 2014-15 was the
only Village Trustee that demanded that the Village Board vote on such transfer
of funds. Hanks and his allied Trustees
have taken on a practice of merely giving “consensus” which is not a formal
process. Village Trustees Burgess,
Cecial Tates and Kelvin Jones have all demanded that such transfers take place
with a public vote. “Taxpayers have a
right to know how elected officials are spending their money” Burgess said.
“When this administration ‘borrows’ money from the water
fund or from other funds, there has not been a public vote. This has not taken place during this last
fiscal year. This not only violates
Illinois law (65 ILCS 5/8-1-3.1) but it circumvents the authority of the
Village Board” Tates said.
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!”
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