State audit of Muncie shows lack of controls
MUNCIE, Ind. — The state's first audit of the city of Muncie in three years showed a lack of internal controls over the city's finances.
In some instances pointed out by the Indiana State Board of Accounts audit of the city's books for 2014, city officials replied that they didn't follow some state-mandated procedures because they were not aware of those practices.
Over a period of several months, a team of state auditors studied the city's books for the first time since 2013. The audit — two reports totaling more than 150 pages — was released to The Star Press this past week. The audit covers only 2014 and not 2015, although the latter year was apparently included in the months of audit work covered by examiners during their months reviewing the city's accounts.
The audit does not address questions raised in an ongoing FBI investigation into allegations of wrongdoing in city government, including hundreds of thousands of dollars for demolition contracts awarded to a handful of companies, including two owned by Muncie Building Commissioner Craig Nichols.
Instead, the audit points out shortfalls in internal controls and shortcomings, which are addressed by city officials in responses to the state.
In several instances, the audit cites a lack of internal controls over finances, noting at several points that the lack of controls was "systemic." Despite many citations of lack of controls, the state frequently notes that it was not citing any particular questioned costs.
In some of the city's responses, officials said they were unaware that certain procedures must be followed, and sometimes noted they were taking over for former officials and had been repeating their processes. Muncie Redevelopment Commission Executive Director Todd Donati, in particular, noted that he had followed an MRC director who had held the position for 20 years.
In responding to a state finding that records documenting more than $1,600 in credit card payments, Donati said, "Not to make any excuses, but I am the only person in my department other than my board of directors. Transitioning several processes to the city controller's office will be a huge support and I am grateful that this was recommended. I believe this will allow for the elimination of missed invoices and will substantially correct this issue in the future. I felt it was important to respond so that it is resonated clearly that this issue (is) important and corrective action is important. I do take this seriously."
Among the findings: "The payroll time records of department heads were not reviewed for accuracy before being paid. There were no other controls in pace to ensure the payroll of department heads were correct and accurate." City Controller Audrey Jones told the state that Mayor Dennis Tyler will "review for accuracy" time sheets for department heads.
The state said the bond revenue/Tuhey Pool fund was overdrawn by $110,844, while the Local Road and Street budget was overspent by $115,666.
Contact Keith Roysdon at 765-213-5828 and follow him on Facebook and Twitter.