BROOKVILLE – From improper advance payments for services and claims from vendors without proper documentation, or the bidding process for a controversial bridge project which violated state code, a recent audit conducted of Franklin County government illustrates one certain thing.
The county has been noncompliant in several areas when it comes to its operations.
The Indiana State Board of Accounts this week released its special compliance report conducted of Franklin County, from January 2013 to September 2016, which details a range of non-compliance with both state accounting guidelines and state code in areas such as public purchases, sick leave policy, judicial payroll, salary ordinances, employee timekeeping, prescribed forms, errors on claims submitted to the county and payments made in advance of services.
“We performed procedures to determine compliance with applicable Indiana laws and uniform compliance guidelines established by the Indiana State Board of Accounts and were limited to records associated with payroll, receipts, disbursements, public purchases and internal controls,” wrote Paul D. Joyce, the Indiana State Examiner, in the introductory letter to the report. “The results and comments contained herein describe the identified reportable instances of noncompliance found as a result of these procedures.”
Leading off the report was a situation, beginning in 2013 and running through 2016, where Franklin County paid attorneys in advance to provide pauper legal services, yet kept no documentation of the actual hours of legal services rendered by those attorneys during that time span.
“Each year Franklin County contracted with attorneys to provide legal services to indigent criminal defendants in the Franklin County Circuit Court. Pauper attorney fees were paid to various legal firms in advance of services when the County paid the entire annual contract amounts in January and/or February of each year,” the report states. “Amounts paid in advance were $107,700 for 2013, $45,000 for 2014, $90,000 for 2015, and $90,000 for 2016. We found no reconciliation for the actual hours of legal services provided to the contract amounts paid at the beginning of the year.”
According to the SBOA report, the county should never pay for services in advance, unless specifically authorized by law.
“Compensation and any other payments for goods and services should not be paid in advance of receipt of the goods or services unless specifically authorized by law,” the report states. “Payments made for goods or services which are not received may be the personal obligation of the responsible official or employee.”
The next area the report addressed was errors on several claims, between 2014 and 2016, from E&H Bridge and Grating Inc., of Bedford – a company Franklin County has used predominantly over the past years for its bridgework.
According to the SBOA report, claims from E&H for payments “did not have adequate supporting documentation,” resulting in “unsupported disbursements to the vendor in the amounts of $192,100 in 2014, $263,877 in 2015 and $171,717 through Sept. 16, 2016.”
The county also, per the report, in 2013 paid several claims for legal services from the law firm Worth and Barada LLP. of Rushville, “which did not contain sufficient detail to determine what attorney provided the services, what services were provided, and at what rate the services were billed.”
Public documents, obtained by the News-Examiner, show that a bill for $833 from Worth and Barada – without a specific invoice of the work done listed, but simply the attorney’s name, Grant Reeves and the bill being for one hour of work – was approved in January 2013 by all three Franklin County commissioners at that time – Tom Wilson, Tom Linkel and Scott McDonough. A similar bill was also paid by the county in December 2012 for $1,765, again not showing what specific work was done by the law firm for the county but simply listing Reeves as the attorney who provided the services, for a total of one hour. That was also approved by the aforementioned commissioners.
Per the SBOA, such payment of claims without supporting documentation violates Indiana Code 5-11-10-1.6, unless “there is a fully itemized invoice or bill for the claim; the invoice or bill is approved by the officer or person receiving the goods and services; the invoice or bill is filed with the governmental entity’s fiscal officer; the fiscal officer audits and certifies before payment that the invoice or bill is true and correct; and payment of the claim is allowed by the government entity’s legislative body or the board or official having jurisdiction over allowance of payment of the claim.”
Also, IC Code 5-11-9-2, per the report, states that “On and after January 1, 1948, all accounts or vouchers of any political subdivision of the state for personal services of officers and employees shall be made in such form as may be prescribed by the state board of accounts.”
Another area Franklin County was shown to be non-compliant in, per the SBOA report, was the area of public purchases – specifically related to the Stockpile Road Bridge project, a project which has garnered much controversy over the past few years and also involved E&H Bridge and Grating, Inc., the very company involved in an earlier portion of the SBOA report.
The bridge project, since completed, has been questioned by several county residents in the past, not only regarding the cost and the accounting of that cost, but the fact the county had 19 other bridges in more need of repair – per its own inspection report – and that few residents actually resided on Stockpile Road, along with the traffic count, to justify the replacement of that particular bridge.
With the public purchase situation, per the SBOA report, the county commissioners failed to adhere to state law regarding the bidding process for the Stockpile Road Bridge.
“The County purchased a prefabricated bridge on June 1, 2015 for Stockpile Road. The cost of the bridge was $190,236. The Commissioners had awarded the 2015 annual bids for steel bridges to the vendor on December 9, 2014,” the report stated. “However, this bridge did not comply with the annual bid specifications advertised and awarded by the Commissioners.
“The bridge purchased was not the same size as the various sizes included in the annual bid specifications or the bid presented and awarded to the vendor. In addition, the Commissioners’ minutes for November 10, 2014, stated a Commissioner proposed replacing an existing 10 foot concrete slab (bridge) on Stockpile Road with a 24 foot wide by 85 foot long steel bridge,” the report continued. “The minutes indicated that the acceptance of the bid in the amount of $190,236 from the vendor was in order to lock in the current price. There was no previous discussion regarding letting bids for a bridge on Stockpile Road noted in the Commissioners’ minutes prior to November 10, 2014. The Commissioners were unable to provide evidence of any separate advertising for the bid specifications, bid opening, and bid awarding for the November 10, 2014 award date.”
Per the SBOA, this violated Indiana Code 5-22-7 and several of its subsections regarding the proper bidding process.
Regarding bids for supplies and bridge construction projects, the county also was non-compliant when it came to using the prescribed forms needed, specifically County Form 115, a “Bidder’s Record.”
The county’s sick leave policy was also an area the SBOA report focused on, as a review of payroll vouchers showed that a highway department employee – hired March 27, 2015 – was paid for 36 sick leave hours between their hire date and Dec. 18, 2015, when the county’s personnel policy handbook stated that during 2015, county employees did not earn sick leave until being employed for one year.
Commissioners amended that policy on Dec. 21, 2015, to grant full-time employees 6.5 sick leave hours every 52 calendars days of employment during their first year.
“Each unit is responsible for complying with the ordinances, resolutions and policies it adopts,” stated the SBOA in its report.
The county was also dinged by the SBOA on supplemental pay it made, in 2014, to both Franklin Circuit Court judges, as the report stated the county paid the supplemental $5,000 directly to each judge, instead of “remitting the supplemental pay to the Auditor of the State of Indiana for payment,” contrary to Indiana Code 33-38-5-6.
The final areas the county was scrutinized on were the salary ordinance and employee timekeeping, in which the SBOA found that in 2016, the county paid one employee – working both at the county’s Transfer Station and Small Animal Control – the highest pay rate for both positions, instead of adhering to the salary ordinance for each position which had been approved by the County Council.
“The Commissioners did not recommend and Council did not approve an amendment to the salary ordinance authoring payment at the higher rate for employees who worked for more than one department/position in the county,” the report stated. “In November 2016, the Council approved an amendment of the salary ordinance effective retroactively to April 1, 2016, to correct the non-compliance.”
This, according to the SBOA, was contrary to Indiana Code 36-2-5-3(a).
Regarding employee timekeeping, the SBOA report found that “some employees who work for more than one department of the County do not have a detailed record of time worked in each position,” contrary to Indiana Code 5-11-9-4.
“Indiana Code 5-11-9-4 requires that records be maintained showing which hours are worked each day for employees employed by more than one political subdivision or in more than one position by the same public agency,” the report concluded.