SAUK VILLAGE FINANCIAL MESS - WHERE THE HELL IS THE MONEY GOING?

This is the eight and the final 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 |  When it came to the “Watergate Scandal” where money was spent from the Water Fund for a grass cutting scheme not included in the Village’s Budget in 2014.  Trustee Derrick Burgess exposed that scandal because of his tenacity and the questions he asked.  Burgess, at that time was the only Village Trustee who dared ask the Hanks Administration how money was being spent.  Burgess criticized the Hanks Administration for irresponsible spending of water funds without the Village Board’s approval at that time.
 
The Village applied for and received a grant from the State of Illinois and one of the items the grant would cover was for mowing lawns for vacant homes.  The glitch was that the Village had to pay for the project beforehand and get reimbursed later.  None of this was discussed during the Budget process and no funds were budgeted for the program.  The Hanks administration and the Housing Commission had people out mowing lawns with no way to pay those doing the service and scrambled to take money from the water fund without the Village Board's approval.  The grant was suspended by the State of Illinois due to the financial fiasco of the State.

This past week, it was learned that a former fire fighter mowed some lawns under the program in 2014 to the tune of $650, but the Village incorrectly reported that this individual was paid $65,000 and now the Internal Revenue Service wants $27,000 from this person for taxes and penalties.  The IRS is investigating the matter.

Now let’s take a look at the 2014-15 Audit Report Management letter which found some very irresponsible actions reported.  The following is an excerpt from the letter:

14.   Grant Tracking (Repeated from Prior Year)

The Village lacks an adequate system to track grant revenues and related expenditures.  We recommend that the Village create a system to track grant revenues and related expenditure, to ensure that both revenues and expenditures are properly recorded in the correct period.

(Editorial Note:  Trustee Derrick Burgess made this very recommendation to Mayor David Hanks and to the Village Board during the Budget hearings in the summer of 2014.  Burgess suggested that Grant monies not be allocated under the departmental line items, however, Hanks scoffed at the idea in a two hour diatribe before they passed the budget by a 5 to 1 vote, Burgess the only NO vote; Trustees voting yes: Rosie Williams, Lynda Washington, Ed Myers former Trustees John Poskin and Jeff Morden)

15.   Sauk Village Housing Commission

The Village did not properly establish the Sauk Village Housing Commission (the Commission) as an agency fund of the Village.  The Commission was established during fiscal year 2015, and meets the criteria for recognition as an agency fund of the Village due to the nature of the relationship between the Village and Commission.  We recommend that the Village give appropriate consideration to the nature of potential agency and other fiduciary relationships that may occur in the future, to ensure their proper recording in the Village’s financial statements.

(Editorial Note:  The Hanks Administration is running the Housing Commission, whose sole purpose is for enforcing Fair Housing laws, as a “Housing Authority”.  Many are of the opinion that this violates Illinois law and that the Housing Commission has overstepped their legal mandate and authority.)

16.   Sauk Village Housing Commission- Cash Handling

During fiscal year 2015, a cash withdrawal was made an automatic teller machine (ATM), from the Sauk Village Housing Commission bank account.  The Sauk Village Housing Commission is an agency fund of the Village.  Per management, the withdrawal was made by a commissioner of the Sauk Village Housing Commission.  We recommend that the Village discourage the use of ATM transaction, and instead reinforce the need to process all transactions through the internal controls of the Village.

(Editorial Note:  Wow!  This is truly amazing!  No other community allows non-bonded people to be a signer on an account and none allow one to have an ATM card so they could clean the account out.  This is ripe for fraud, misappropriation of funds when people are permitted to do this)

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!”