Town treasurer resigns after financial faux pas found - 14 News, WFIE, Evansville, Henderson, Owensboro

Town treasurer resigns after financial faux pas found

Town treasurer resigns, accused of mismanagement and misusing funds

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At 6 P.M. Thursday night the Clerk Treasurer of Chandler submitted his resignation, effective immediately. 

Brian Lucas the Council President has this to say about it: "Many are aware we had discovered shortcomings by the Clerk Treasurer. The balancing of the checkbooks were not being done by the clerk treasurer.  We discovered this with the help of our town grant administrator as we were closing a multi-million dollar grant. 

We hired the accounting firm HJ Umbaugh and Associates to balance the books and teach the clerk treasurer to do this part of his job.  We learned as the accountants were doing their work that payment of our claims were being taking out of the wrong account. 

With Umbaugh's assistance, we established a line item accounting system that would make sure payments would be deducted from the correct account and allow our department heads to know as to where they stood within their budgets at all times. 

Our grant administrator and our utilities director reported that there were delays in paying the contractors building our water plant.  As the checkbooks were being balanced and we were bringing online the new line item budget procedure, we were still having difficulty in receiving the desired information from the clerk treasurer regarding the town's budget and accounting process. 

The accountant hired by the town advised very recently that it was becoming apparent to them that the clerk treasurer was going to have difficulty in performing the duties of this job.  We were receiving complaints that our clerk treasurer was spending less time in his office.  We learned that the checkbooks were still being balanced by the outside accountants.  He was not completing the tasks requested by the accountants and he was relying on them and the grant administrator to do most of his work. 

With this knowledge, on May 3rd, the town council requested an immediate audit by the Indiana State Board of Accounts of the town and utility accounts.  In fairness, at this point, our accountants had advised our attorney that no misappropriation of funds had come to their attention at that time. 

Due to the fact that the state board of accounts was involved in auditing duties in other communities and we were going to experience a delay in their starting in Chandler and due to the fact that we had no confidence in the clerk treasurer's record keeping, we could not allow the situation to go unchecked. 

On June 4th, we created the position of utility clerk and assigned all utility financial issues and all utility clerical personnel to that position.

We hired a very capable person into this position and we are now able to monitor and work with credible data to properly oversee the utility department.  As the clerk treasurer is an elected official, we could not, by law dismiss him.  We could not take over his civil statutory duties, which include the payroll and the general fund, however the utility clerk and her staff have performed most of the clerk treasurer duties so that the general fund accounts are now properly administered. 

With this background, we now have confirmed and can advise that the state board of accounts has made reports to the Indiana State Police.  On October 18th, the ISP secured a search warrant to enter the clerk treasurer's home. 

Last Thursday, a week ago, the Indiana State Police searched this residence.  This Wednesday, State Police reported to the Warrick Superior Court #2, that when they searched the clerk treasurer's home, they seized numerous items of property, allegedly purchased with town funds with neither the knowledge or the authority of the town council. 

The Indiana State Police investigation is ongoing and their reports are not available to us at this time.  We have not spoken out earlier as we have been asked not to by the state board of accounts and for the further reason that we had not received confirmation of the circumstances. 

It would have been irresponsible and reckless to make public allegations based upon rumors that had not been substantiated.  The State Board of Account audit is now complete and we will receive a report of the audit together with their comments on October 31st. 

Indiana law requires that I appoint a person to assume the duties of the office until the office is filled by a caucus of the Chandler precinct committeemen of the Democratic party according to law.  I am this day, appointing Misty Deenk, the town utility clerk to assume the duties of the clerk treasurer, pending the caucus, which should happen in about 30 days. 

The town of Chandler will now move forward with all of our team working toward the same goal."

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