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McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO http://northwestindiana.com/discussionforum/viewtopic.php?f=15&t=11557 |
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Author: | justcallmetommy [ Mon Feb 17, 2014 4:16 am ] |
Post subject: | McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: http://nwigazette.com/2014/02/16/hammond-sanitary-district-2m-overdrawn-3-8m-owed-to-nipsco/
Hammond Sanitary District-$2M Overdrawn, $3.8M Owed to NIPSCO By Ken Davidson - Published: 02/16/2014 - Section: Uncategorized Nearly $4M in Overdue NIPSCO Bills Due as of July, 2013; Accounts Overdrawn A newly issued report from the Indiana State Board of Accounts details numerous accounting errors at the Hammond Sanitary District. The District, which serves Hammond and Munster residents, is in the process of preparing a 30% rate increase case to be presented at some time in the future, according to the report. The report covers the time period January 1, 2012 through December 31, 2012 and was released in January 2014. A note in the report indicates that the contents of the report were discussed with City officials in September, 2013: The contents of this report were discussed on September 24, 2013, with Robert Lendi, CPA, Controller; Rachel Montes, Business Manager; and Marty J. Wielgos, Chief of Staff Apparently, Munster Town officials were not notified in advance of the report findings. Among the findings in the report were unreconciled bank transactions. The report states: BANK ACCOUNT RECONCILIATIONS The Hammond Sanitary District (District) payroll bank reconcilement at December 31, 2012, included many adjustments that were not adequately documented. The reconciling items totaled $10,859.02. Some of the reconciling items dated back to 2011; others were not properly dated and did not note the fund for which the adjustment was required. The District has not made adjustments to the records in a timely manner. The majority of the adjustments included with the December 31, 2012 reconcilement are also included with the reconcilement at July 31, 2013. Indiana Code 5-13-6-1(e) states: “All local investment officers shall reconcile at least monthly the balance of public funds, as disclosed by the records of the local officers, with the balance statements provided by the respective depositories.†The report further found that the Utility was delinquent in numerous payments, including payments for gas and electric utilities in the amount of $1,390,221 and $2,330,846, as of December 31, 2012, and July 31, 2013, respectively. Additionally, the report found several overdrawn accounts: OVERDRAWN CASH BALANCES Overdrawn cash balances at December 31, 2012, were as follows: Fund Overdrawn Amount Sanitary District Operating $1,313,692 Sanitation Utility Operating $378,065 Recycling Utility Operating $667,185 or financial statement reporting, the Sanitary District’s Bond and Interest Fund, a restricted fund, was reduced by the amount of the overdrafts. The overdrafts are reported as “Due From Sanitary District Unrestricted Funds†on the Statement of Net Position. The cash balance of any fund may not be reduced below zero. Routinely overdrawn funds could be an indicator of serious financial problems which should be investigated by the governmental unit. (Accounting and Uniform Compliance Guidelines Manual for Special Districts, Chapter 10) See the Full Text of the Report: Hamond Sanitary District SBOA Report Full Text EDITOR’S NOTE: An earlier version of this article contained a headline with an incorrect amount for the unreconciled transactions. The Gazette apologizes for the error. The correct amount of unreconciled transactions is $10,859.02 |
Author: | justcallmetommy [ Mon Feb 17, 2014 4:22 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Well, finally someone else covering fiscal ineptitude by the McDermott administration. With $2 million overdrawn and $3.8 million past due to NIPSCO, it is a wonder Tom McDermott Jr's mismanagement is not causing s*** to overflow in Spark's toilet. Legal fee payments to attorneys have eaten up large swaths of economic resources. It would be interesting to find out how much has been paid to some of Tom's closest advisors. Tom popularity seems to be going in a clockwise spiral down the shitter. http://nwigazette.com/wp-content/uploads/2014/02/sanitary.pdf |
Author: | justcallmetommy [ Mon Feb 17, 2014 4:30 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: -7-
SANITARY DISTRICT CITY OF HAMMOND NOTES TO FINANCIAL STATEMENTS I. Summary of Significant Accounting Policies A. Reporting Entity The financial statements reflect only the activity of the Sanitary District, a department of the City of Hammond, and are not intended to present fairly the position of the City of Hammond (City), and the results of its operations and cash flows of its enterprise funds. The Sanitary District, whose operations are controlled by the City, represents a substantial portion of the City's enterprise funds. The Sanitary District comprises the Sanitary District, Storm Water Utility, Sanitation Utility, and Recycling Utility. -10- SANITARY DISTRICT CITY OF HAMMOND NOTES TO FINANCIAL STATEMENTS (Continued) 7. Long-Term Obligations Long-term debt and other long-term obligations are reported as liabilities in the Statement of Net Position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. http://nwigazette.com/wp-content/uploads/2014/02/sanitary.pdf page 12 II. Detailed Notes on All Funds A. Deposits Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned to it. Indiana Code 5-13-8-1 allows a political subdivision of the State of Indiana to deposit public funds in a financial institution only if the financial institution is a depository eligible to receive state funds and has a principal office or branch that qualifies to receive public funds of the political subdivision. The Sanitary District does not have a deposit policy for custodial credit risk. At December 31, 2012, the Sanitary District had deposit balances in the amount of $16,591,031 for Sanitary District; $1,490,490 for Storm Water Utility; $(296,507) for Sanitation Utility; and $(667,185) for Recycling Utility. The bank balances were insured by the Federal Deposit Insurance Corporation or the Public Deposit Insurance Fund, which covers all public funds held in approved depositories. |
Author: | justcallmetommy [ Mon Feb 17, 2014 4:44 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: http://nwigazette.com/wp-content/uploads/2014/02/sanitary.pdfOVERDRAWN%20CASH%20BALANCES page 25 Overdrawn cash balances at December 31, 2012, were as follows: For financial statement reporting, the Sanitary District's Bond and Interest Fund, a restricted fund, was reduced by the amount of the over drafts. The overdrafts are reported as "Due From Sanitary District Unrestricted Funds" on the Statement of Net Position. The cash balance of any fund may not be reduced below zero. Routinely overdrawn funds could be an indicator of serious financial problems which should be investigated by the governmental unit. (Accounting and Uniform Compliance Guidelines Manual for Special Districts, Chapter 10) Now that overdrawn & should be investigated by the government unit has appeared in numerous SBA audits.... and yet the Times, Post Tribune and other media outlets just over look it, but let Gary or Highland have some type of issue and they are crucified in the papers. Maybe Tom might get a feel good question this Friday. |
Author: | sparks [ Mon Feb 17, 2014 6:19 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Sounds like you have the loser mobile back up to speed. Once again, the Gazette is running an article without even bothering to interview anyone from the sanitary district. The district is in the black and has been for years. To allege that $2 million was overdrawn is poor reporting. Transferring money from one fund to another fixes the issue the board of accounts found in the audit. |
Author: | Neometric [ Mon Feb 17, 2014 7:45 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Well, the state board's audit sheds more light as to why HSD is trying to bully neighboring communities into unilaterally imposed higher utility rates. Now HSD is poised to ask for a 30 percent bump, on top of the increases recently imposed for municipal bonds in Y2013. I wonder how many hundreds of thousands have been and are still being spent for legal fees in the HSD litigation? |
Author: | lubu [ Mon Feb 17, 2014 10:37 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
sparks wrote: Sounds like you have the loser mobile back up to speed. Once again, the Gazette is running an article without even bothering to interview anyone from the sanitary district. The district is in the black and has been for years. To allege that $2 million was overdrawn is poor reporting. Transferring money from one fund to another fixes the issue the board of accounts found in the audit. Now "sparks" is a forensic accountant! There is not an "allegation". The overdrawn accounts are fact. Quoting the SBA "The cash balance of any fund may not be reduced below zero. Routinely overdrawn funds could be an indicator of serious financial problems which should be investigated by the governmental unit." Personally I think it should be investigated by another governmental unit, the US Attorney. Why was Wielgos brought back and why to the Sanitary District? I suppose if you don't pay your bills, you can remain "in the black". Transferring money may not fix the issue. If you can't afford to live on an annuity, and keep transfering out principal to pay your bills, eventually you are BROKE! Sparks; tell us why NISPCO is being paid late. Tell us why the HSD books smell like the waste they handle. |
Author: | LaughingAtLakeCo [ Mon Feb 17, 2014 1:34 pm ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
"Transferring money from one fund to another fixes the issue the board of accounts found in the audit"? What about the other fund? You'd think that a University of Chicago graduate might possess one iota of financial acumen, but I guess in this case one would be wrong. Its no wonder that even with a degree from a world-renowned institution you are crawling around the basements of decrepit Hammond buildings. |
Author: | bert68 [ Mon Feb 17, 2014 6:10 pm ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
sparks wrote: Sounds like you have the loser mobile back up to speed. Once again, the Gazette is running an article without even bothering to interview anyone from the sanitary district. The district is in the black and has been for years. To allege that $2 million was overdrawn is poor reporting. Transferring money from one fund to another fixes the issue the board of accounts found in the audit. Your answer to move money from one account to another sounds similar to a Ponzi scheme. Is this a generally accepted accounting practice Sparkie? |
Author: | justcallmetommy [ Mon Feb 17, 2014 7:24 pm ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: http://www.in.gov/sboa/WebReports/B41654.pdf -23- SANITARY DISTRICT CITY OF HAMMOND EXAMINATION RESULTS AND COMMENTS (Continued) TEMPORARY LOANS BETWEEN FUNDS On February 14, 2012, the District Board adopted Resolution 64-2 011 which authorized temporary loans between funds as follows: Transferred To Transferred From Amount Operations and Maintenance (Sanitary District) Replacement (Sanitary District) $1,200,0000 Sewer Maintenance (Sanitary District) Storm Water Utility $90,000 Recycling Utility Storm Water Utility $350,000 The loans were posted to the records in December 2011, prior to the authorization date. The loans were recorded in December 2011 in order to avoid reporting a deficit cash balance as of December 31, 2011. The loans were also authorized for repayment prior to December 31, 2012, by the Board per another resolution also adopted on February 14, 2012. The repayments were recorded on April 9, 2012. Indiana Code 36-1-8-4 states in part: "(a) The fiscal body of a political subdivision may, by ordinance or resolution, permit the transfer of a prescribed amount, for a prescribed period, to a fund in need of money for cash flow purposes from another fund of the political subdivision if all these conditions are met: (1) It must be necessary to borrow money to enhance the fund that is in need of money for flow purposes. (2) There must be sufficient money on deposit to the credit of the other fund that can be temporarily transferred. (3) Except as provided in subsection (b), the prescribed period must end during the budget year of the year in which the transfer occurs. (4) The amount transferred must be returned to the other fund at the end of the prescribed period. (5) Only revenues derived from the levying and collection of property taxes or special taxes or from operation of the political subdivision may be included in the amount transferred. (b) If the fiscal body of a political subdivision determines that an emergency exists that requires an extension of the prescribed period of a transfer under this section, the prescribed period may be extended for not more than six (6) months beyond the budget year of the year in which the transfer occurs . . ." Smells like someone is playing with da money. Hammond's Civil City budget is running substantial deficits. Loans from one account to cover another account beyond the legal lending period... Tom seems to be playing games with money. I wonder who in this case may take the hit? I distinctly remember how a past city controller wound up in jail. ![]() |
Author: | justcallmetommy [ Mon Feb 17, 2014 7:24 pm ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: http://www.in.gov/sboa/WebReports/B41654.pdf page 23 Audit period covering Jan 1 2011 to December 31st, 2011 -23- SANITARY DISTRICT CITY OF HAMMOND EXAMINATION RESULTS AND COMMENTS (Continued) TEMPORARY LOANS BETWEEN FUNDS On February 14, 2012, the District Board adopted Resolution 64-2 011 which authorized temporary loans between funds as follows: Transferred To Transferred From Amount Operations and Maintenance (Sanitary District) Replacement (Sanitary District) $1,200,0000 Sewer Maintenance (Sanitary District) Storm Water Utility $90,000 Recycling Utility Storm Water Utility $350,000 The loans were posted to the records in December 2011, prior to the authorization date. The loans were recorded in December 2011 in order to avoid reporting a deficit cash balance as of December 31, 2011. The loans were also authorized for repayment prior to December 31, 2012, by the Board per another resolution also adopted on February 14, 2012. The repayments were recorded on April 9, 2012. Indiana Code 36-1-8-4 states in part: "(a) The fiscal body of a political subdivision may, by ordinance or resolution, permit the transfer of a prescribed amount, for a prescribed period, to a fund in need of money for cash flow purposes from another fund of the political subdivision if all these conditions are met: (1) It must be necessary to borrow money to enhance the fund that is in need of money for flow purposes. (2) There must be sufficient money on deposit to the credit of the other fund that can be temporarily transferred. (3) Except as provided in subsection (b), the prescribed period must end during the budget year of the year in which the transfer occurs. (4) The amount transferred must be returned to the other fund at the end of the prescribed period. (5) Only revenues derived from the levying and collection of property taxes or special taxes or from operation of the political subdivision may be included in the amount transferred. (b) If the fiscal body of a political subdivision determines that an emergency exists that requires an extension of the prescribed period of a transfer under this section, the prescribed period may be extended for not more than six (6) months beyond the budget year of the year in which the transfer occurs . . ." Smells like someone is playing with da money. Hammond's Civil City budget is running substantial deficits. Loans from one account to cover another account beyond the legal lending period... Tom seems to be playing games with money. I wonder who in this case may take the hit? I distinctly remember how a past city controller wound up in jail. ![]() |
Author: | justcallmetommy [ Mon Feb 17, 2014 7:38 pm ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: http://www.in.gov/sboa/WebReports/B41654.pdf -21- SANITARY DISTRICT CITY OF HAMMOND EXAMINATION RESULTS AND COMMENTS (Continued) Political subdivisions are required to comply with all grant agreements, rules, regulations, bulletins, directives, letters, letter rulings, and filing requirements concerning reports and other procedural matters of federal and state agencies, including opinions of the Attorney General of the State of Indiana, and court decisions. Governmental units should file accurate reports required by federal and state agencies. Noncompliance may require corrective action. (Accounting and Uniform Compliance Guidelines for Special Districts, Chapter 10) ACCOUNTS PAYABLE VOUCHERS AND WARRANTS The City Controller is the fiscal officer of the Sanitary District. As the fiscal officer, the City Controller is responsible for certifying all claims or accounts payable vouchers, prior to disbursing the funds. The certification of claims by the City Controller can be accomplished by either signing each claim or signing a claim docket which lists each and every claim considered for payment during a specific period of time. In 2011, none of the claims or claim dockets were signed by the City Controller. Indiana Code 5-11-10-2(a) states: "Claims against a political subdivision of the state must be approved by the officer or person receiving the goods or services, be audited for correctness and approved by the disbursing officer of the political subdivision, and, where applicable, be allowed by the governing body having jurisdiction over allowance of such claims before they are paid. If the claim is against a governmental entity (as defined in section 1.6 of this chapter), the claim must be certified by the fiscal officer." Ok so, if you've been following some of my post over the last couple of years, you have read this before. Non Compliance, but in this case, what is especially interesting the auditor writes.... IN 2011, NONE OF THE CLAIMS OR CLAIM DOCKETS WERE SIGNED BY THE CITY CONTROLLER.... AS REQUIRED BY LAW... SO SOMEONE JUST PAID CLAIMS NOT KNOWIN IF THEY WERE LIGITAMET OR ILLEGATIMATE... MAYOR MCDERMOTT JR... come on now Tom, did someone pay one or two of your pals when they shouldn't have. Didn't someone in the redevelopment commission open a bank account, deposit $600,000 into the account and then write, with out authorization checks for $550,000 to vendors with out board approval. Come on Mayor did you get a tribute? |
Author: | justcallmetommy [ Mon Feb 17, 2014 8:03 pm ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Actually Tom, that crack about did you get yours, is sorta out of line, but the question needs to be asked, why would a mayor tolerate this type of fiscal accounting, and now a $4,000,000 shortage? Is NIPSCO going to turn off the utilities, like the did at 644 Sibley for non payment? Quote: STATEMENT OF REVENUES, EXPENSES, AND OTHER CHANGES IN FUND NET ASSETS
Sanitary District Year End Balance $ 100,484,382 Storm Water Utility $1,297,215 Sanitation utility $293,062 Recycling $(207,056) STATEMENT OF CASH FLOWS Sanitary District $465,577 Storm Water Utility $190,522 Sanitation Utility $(237,342) Recycling Utility $(45,299) |
Author: | justcallmetommy [ Tue Feb 18, 2014 6:04 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
To understand how well Mayor Thomas McDermott Jr and Hammond's Chief Financial Officer Manage Hammond's Finances and provide a historical perspective: Quote: http://www.in.gov/sboa/WebReports/B42998.pdf page 43
INTERNAL CONTROLS OVER FINANCIAL TRANSACTIONS AND REPORTING We noted deficiencies in the internal control system of the City related to financial transactions and reporting. Effective internal control over financial reporting involves the identification and analysis of the risks of material misstatement to the City's audited financial statement and then determining how those identified risks should be managed. The City has not identified risks to the preparation of a reliable financial statement and as a result has failed to design effective controls over the preparation of the financial statement to prevent or detect material misstatements. The City has not established effective controls to allow for the proper reporting of the City's financial transactions and cash and investment balances. Reconciled trust and bank account balances were not verified by management which allowed material misstatements in the original financial statement. The financial statement was compiled from information entered by the City into the Annual Financial Report. The financial statement presented for audit included the following errors and omissions which we believe constitute material weaknesses: 1. The financial statement omitted three funds that were accounted for in the City's ledgers. These funds included receipts of $39,029,641, disbursements of $38,881,449, and an ending cash and investments balance of $148,192. 2. The financial statement [b]omitted eight trust funds related to public improvement projects.These funds were also not in the City's records and included receipts of $42,337,030, disbursements of $31,467,555, and an ending cash and investments balance of$10,869,475. 3. The receipts and disbursements of several Hammond Sanitary District funds were under- stated by $32,116,943 and $35,030,385, in total, respectively. These errors also resulted in the ending cash and investments balance of these funds to be overstated by a total of $2,913,443. The misstatements were due to reporting the funds on the accrual basis of ac- counting rather than the prescribed regulatory basis.[/b] The City approved and made the necessary adjustments to correct these issues which results in a financial statement that is fairly presented. |
Author: | justcallmetommy [ Sat Feb 22, 2014 6:53 am ] |
Post subject: | Re: McDermott's mismanagment, $2mil overdrawn, $3.8 owed NIPSCO |
Quote: http://www.in.gov/sboa/WebReports/B42998.pdf-44-
CITY OF HAMMOND AUDIT RESULTS AND COMMENTS (Continued) INTERNAL CONTROLS AND COMPLIANCE OVER REPORTING FEDERAL EXPENDITURES IN THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS The City did not have a proper system of internal controls in place to prevent or detect and correct errors on the Schedule of Expenditures of Federal Awards (SEFA). The City should have proper controls in place over the preparation of the SEFA to ensure accurate reporting of federal awards. Without an effective system of internal controls in place, material misstatements of the SEFA could remain undetected. The City has not established controls to effectively identify, manage, and report federal financial assistance. Under the current system, each department independently monitors their grant activities. Grant agreements and requests for advances or reimbursements of federal funds are not always provided to the City Controller. Federal and state grant monitoring reports are prepared by each department based upon the records of grant activities maintained by the departments. The City Controller relies on each department to report their federal assistance activities for use in preparing the SEFA. In failing to establish controls to effectively identify, manage, and report federal financial assistance, the City materially misrepresented the federal assistance expended in 2012 on the SEFA presented for audit. During the audit of the SEFA, we noted the following material errors and/or omissions which we believe constitute material weaknesses: 1. The City initially reported federal expenditures of $3,848,615. Audit adjustments to the SEFA were $1,039,784. The total of federal expenditures for 2012 has been determined to be $4,888,399. 2. The City failed to report Capitalization Grants for Clean Water State Revolving Funds which were passed through the Indiana Finance Authority in the amount of $1,049,369. The receipts and disbursements associated with this grant were accounted for by the Hammond Sanitary District. 3. The City failed to report expenditures associated with the Highway Safety Cluster of $61,537 which passed through the Indiana Criminal Justice Institute. These funds were administered by the Hammond Police Department and accounted for in the official records of the City Controller. 4. The City made additional errors and/or omissions which totaled $71,122. 5. The City failed to correctly identify pass-through entities. 6. The City failed to report that the Energy Efficiency and Conservation Block Grant Program was funded with American Recovery and Reinvestment Act of 2009 funds (ARRA). Audit adjustments were proposed, accepted by the City, and made to the SEFA presented in this report. These adjustments resulted in a presentation of the SEFA that is materially correct in relation to the financial statement. A similar finding appeared in the prior report. |
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