Plante & Moran found a problem with Independence Township’s handling of money in this year’s audit.
‘The township’s cash receipts functions are not appropriately segregated,? said Plante & Moran CPA Joe Heffernan, who along with CPA Chrystal Simpson presented the report to the Board of Trustees, June 23.
The same people who receive cash at the township office are the same individuals who balance the cash drawers and take the deposits to the bank, Heffernan said.
A lack of segregation of cash-receipting duties could result in “misappropriation” of township funds, he said.
Township treasurer Paul Brown said departments were already working together to address the issues.
‘Our way of doing things has been done that way for 20 years, but we know this insight and a new way of doing things is good,? Brown said, adding a new procedure is being created and will be brought to trustees for approval.
Audit reps also concluded some sewer revenues were incorrectly labeled, and sampling the payroll found issues that could lead to under or overpayment of township employees.
Numerous special assessment funds must also be cleaned up, Plante-Moran reported.
The township currently has 21 Special Assessment District funds. Just one, the Sashabaw Drain debt service, collected funds in 2014.
The remaining 20 SAD funds have an accumulated total balance of approximately $1 million since December 2014, which could mean a refund for taxpayers.
Simpson said auditors recommend the township perform a comparison of assessments funds collected compared to costs incurred to determine whether refunds are required or revenue can be retained by the township.
‘We recommend that these funds be closed and the excess funds be transferred back to the general fund,? she added.
‘Our plan is to gather them all in one location, sort them in chronological order and see what we can close and move,” said Township Finance Director Wendy Thomas.
Plante Moran also met with building department director Dave Belcher to discuss adjusting down and monitoring finances in that department, in which $200,000 is unreconciled and still must be accounted for.
“We are assuming bills were being charged to the wrong account,? Simpson said.
‘For a number of years the building department was on a different records system,? trustee Ron Ritchie said.
Thomas, the township’s current finance director hired in 2014, was commended for her work on the township’s finances.
‘She is about 80 percent done with the clean-up,? said Clerk Barb Pallotta.”She is on task and she digs deep.”
Trustee Andrea Schroeder agreed.
‘There were items here before, but there is also things she discovered,? Schroeder said.
The auditors also had good news for the township.
‘You had a very good audit committee,” Heffernan said. ‘They were very engaged.?
He added not many smaller governments have such committees. The township was also a minority when it came to long-term liabilities.
Heffernan said more than 50 percent of municipalities will be in the negative under the new government accounting standards that add long-term pension and retirement liabilities. Independence Township managed the liabilities better than many other communities.
‘You should be very proud. The other municipalities we audited look much different,? he said.
There was also other good news for the township.
‘Independence Township is currently going through a controlled growth spurt after six years of economic stagnation,” he said. “Both residential and commercial properties are finally starting to see market values increase.”
About 500 new homes are planned to be built in the township over the next few years. Also, the Sashabaw corridor continues growing,with an 80-room hotel and restaurant, and a 70,000 square-foot medical rehabilitation center in development, he said.
Each year, the township hires an independent auditing firm to evaluate the finances of municipalities and ensure they meet auditing standards accepted in the United States.
In November 2014, the township fired their previous auditing firm, UHY, for over billing issues and cost over runs the firm tried to bill for the 2012 audit.