Hancock parks, rec audit reveals missing funds - Beckley, Bluefield & Lewisburg News, Weather, Sports

Hancock parks, rec audit reveals missing funds

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Auditor Glen B. Gainer's office may not be able to tell Hancock County commissioners what happened to nearly $35,000 in missing parks and recreation department funds, why vendor payments totaling more than $25,000 hadn't been reported to the IRS or how taxable wages for park board employees could be under-reported by more than $90,000 over the past four years.

What office officials could and did tell the commissioners is that the park board's record keeping and internal controls during that four year period were inadequate. 

"We were unable to obtain sufficient competent evidence supporting the revenues and expenses of the financial activities of the Hancock County Parks & Recreation Board," Gainer said in his report to the Hancock County Commission. "Furthermore, management was unable to provide representations related to financial statement amounts, disclosures and potential contingent liabilities. 

"We were unable to satisfy ourselves about the existence of certain financial transactions by means of other audit procedures."

Among the more egregious missteps singled out by the auditor's office are:

 

  • The same person "could collect monies, prepare receipts, prepare deposits, make deposits, prepare disbursements, sign checks, open the mail, prepare the monthly financial statement and perform all bank reconciliations.
  • With no policy in place, "not all revenues were receipted, nor entered in the accounting software as revenue, and the source of the revenue was not noted."
  • Board members didn't "examine and approve" all disbursements and checks were being signed by an authorized signatory prior to the payee and amount being filled in.
  • Meeting minutes were not available for public inspection.
  • Vendors were being paid without invoices being kept on file.
  • Sales taxes weren't collected on gift shop purchases or campsite rentals.

 

Hancock County Prosecutor Jim Davis said both the West Virginia State Police and Internal Revenue Service are looking closely at the auditor's reports as well as the department's operations.

"It's ongoing, it's an ongoing investigation," Davis said. "We haven't finalized anything yet, or it wouldn't be ongoing."

Davis said he's been told the IRS is treating the under-reported earnings as an "ongoing" civil matter, but the issue of missing funds is strictly local.

"That's the concern to myself, commissioners and everybody involved with the process," he said. "When public monies come up missing, it's not a good thing. 

"I honestly don't know exactly how much is missing without looking at the file, but it's a very significant amount — we're talking at minimum, tens of thousands of dollars."

And the fact that the fund discrepancies went unreported for more than four years is also concerning, he added.

"It's not normal that it goes on as long as it did," he said. "But they had their own accountant doing their accounting work for them. 

"It's my understanding (commissioners) believed it was being taken care of, that the state became aware of it and took steps to conduct an audit to verify what was going on … the next thing you know, they were four years into it."

Commissioners have said the results of the park board's internal audits since 2008 didn't make it into their own financial statements nor were they submitted to the state by the park board itself. Commissioners realized the omission last year and submitted the information, leading Gainer's office to audit the park board's books for 2008-2011.

"Part of the investigation will be determining who had access, who was able to get at this money and spend it, what oversight there was," Davis said. "There's many, many layers to this thing."

He pointed out that while there is a board overseeing operations, members have changed over the years "and, truth be told, the people who do it volunteer ... out of the good of their heart."

He said the local money involved would have been received "from table gaming and lottery money, that sort of thing."