Northwest Indiana Discussion

well JCMT, what do you make of it? In what way are these deficiencies actionable? Are they actionable? Or do the periodic audits merely function as official feedback (like a dialectical antithesis?) in lieu of hiring professional audit firms, to guide official reconciliation and final adjustments?

I truly don't know. I've seen these audit/financial critiques of Hammond's ledgers for the past seven years. Heard and witnessed the rumors of corruption, investigation, indictment...crime & punishment...Judgment Day, et cetera.

Seven years, JCMT.

Concessions Agreement

The agreement between the Hammond Fire Fighters Association and the Hammond Parks and
Recreation states in part, "The Fraternal Order of Police and the Hammond Fire Fighters Association
have agreed to split 22% of the profit from the 2009 Festival of the Lakes beer concessions after product
is paid for . . ."

Per the summary report, the total beer concessions were $108,275.75. The amount
remitted to the Hammond Firefighters per the ledger was $27,472.10, or approximately 25%.Officials and employees are required to use State Board of Accounts prescribed or approved
forms in the manner prescribed. (Accounting and Uniform Compliance Guidelines Manual for Cities and
Towns, Chapter 7)

IC 5-15-6-3(f) concerning destruction of public records, states in part: "Original records may bedisposed of only with the approval of the commission according to guidelines established by the commission."

Supporting documentation such as receipts, canceled checks, tickets, invoices, bills, contracts,
and other public records must be available for audit to provide supporting information for the validity and
accountability of monies disbursed. Payments without supporting documentation may be the personal
obligation of the responsible official or employee. (Accounting and Uniform Compliance Guidelines
Manual for Cities and Towns, Chapter 7)

Payments made or received for contractual services should be supported by a written contract.
Each governmental unit is responsible for complying with the provisions of its contracts. (Accounting and
Uniform Compliance Guidelines Manual for Cities and Towns, Chapter 7)

CRIME INSURANCE POLICIES
The crime insurance policies have not been filed in the office of the County Recorder as required
by IC 5-4-1-15.1

(b). IC 5-4-1-15.1 states:
"(a) Whenever it is necessary, the appropriate administrative officer of any department or
agency of the state may cover deputies or employees of the department or agency by individual
bonds, or blanket bonds, or a crime insurance policy endorsed to cover the faithful
performance of duties. The administrative officer shall determine the amount of the insurance
policy, individual bond, or blanket bond obtained under this section.

(b) An individual bond, or blanket bond, or crime insurance policy endorsed to include
faithful performance obtained under this section shall be filed and paid for in the same manner
as public official bonds.

(c) This section does not apply to officers required by law to execute and furnish individual
official bonds.

(d) The commissioner of insurance shall prescribe the form of the bonds or crime policies
required by this section."

PRIOR YEAR QUESTIONED COSTS PAID FROM TIF FUNDS
Tax Increment Funds (TIF) Funds are created from additional taxes collected once an economic
development area has been established as a TIF allocation. Expenditures from TIF funds should be used
for the specific allocation area the tax was collected for.

During the 2008 audit, the U.S. Department of Housing and Urban Development (HUD)
questioned costs $1,018,630 ineligible expenditures for the Community Development Block Grant Program.Questioned costs were repaid to HUD on May 11, 2010, from the TIF Allocation Woodmar Fund.Documentation was not provided to ensure that the items noted as questioned costs benefited the TIF
allocation area.

IC 36-7-14-39(b) (2) states in part:
"Except as otherwise provided in this section, property tax proceeds in excess of those
described in subdivision (1) shall be allocated to the redevelopment district and, when collected,
paid into an allocation fund for that allocation area that may be used by the redevelopment
district only to do one (1) or more of the following:

(A) Pay the principal of and interest on any obligations payable solely from allocated tax
proceeds which are incurred by the redevelopment district for the purpose of financing or
refinancing the redevelopment of that allocation area.

(B) Establish, augment, or restore the debt service reserve for bonds payable solely or
in part from allocated tax proceeds in that allocation area.

(C) Pay the principal of and interest on bonds payable from allocated tax proceeds in
that allocation area and from the special tax levied under section 27 of this chapter.

(D) Pay the principal of and interest on bonds issued by the unit to pay for local public
improvements that are physically located in or physically connected to that allocation
area.

(E) Pay premiums on the redemption before maturity of bonds payable solely or in part
from allocated tax proceeds in that allocation area.

(F) Make payments on leases payable from allocated tax proceeds in that allocation
area under section 25.2 of this chapter.

(G) Reimburse the unit for expenditures made by it for local public improvements (which
include buildings, parking facilities, and other items described in section 25.1(a) of this
chapter) that are physically located in or physically connected to that allocation area.

(H) Reimburse the unit for rentals paid by it for a building or parking facility that is
physically located in or physically connected to that allocation area under any lease
entered into under Indiana Code 36-1-10.

(I) For property taxes first due and payable before January 1, 2009, pay all or a part of
a property tax replacement credit to taxpayers in an allocation area as determined by the
redevelopment commission. This credit equals the amount determined under the
following STEPS for each taxpayer in a taxing district (as defined in IC 6-1.1-1-20) that
contains all or part of the allocation area.

(J) Pay expenses incurred by the redevelopment commission for local public improvements
that are in the allocation area or serving the allocation area. Public improvements
include buildings, parking facilities, and other items described in section 25.1(a) of this
chapter.

(K) Reimburse public and private entities for expenses incurred in training employees of
industrial facilities that are located: (i) in the allocation area; and (ii) on a parcel of real
property that has been classified as industrial property under the rules of the department
of local government finance. However, the total amount of money spent for this purpose
in any year may not exceed the total amount of money in the allocation fund that is
attributable to property taxes paid by the industrial facilities described in this clause. The
reimbursements under this clause must be made within three (3) years after the date on
which the investments that are the basis for the increment financing are made.

The allocation fund may not be used for operating expenses of the commission."

DISBURSEMENTS NOT COUNCIL APPROVED

The City budgets the Gaming Revenues Fund to allow for the Mayor and each Council Member
to have "discretionary" funds. In other words, the Mayor and each Council Member can decide how to
spend their specific allotment. Some of the funds are used to pay for street paving, and purchases of vehicles for the street department. In these instances, the vendor is paid directly and the claim is submitted to the Council for approval. In other instances, the Mayor or Council Member may decide to
donate funds to other City departments. For example, funds are donated to the "Festival of the Lakes" or
to the "Henry Unit." In these examples, a claim is prepared; however, it is not submitted to the Council for
approval. These donations account for a significant dollar amount of the expenditures made from the
Gaming Funds.IC 5-11-10-1.6 (c) states:

"The fiscal officer of a governmental entity may not draw a warrant or check for payment of a
claim unless: . . .
(5) payment of the claim is allowed by the governmental entity's legislative body or the
board or official having jurisdiction over allowance of payment of the claim."

FESTIVAL OF THE LAKES
Parking and Concessions
Tickets were sold for parking and beer concessions; however, the tickets were not retained for audit. Ticket sales reports were prepared, but report totals did not always agree to the cash collected. Furthermore, non-prescribed receipts were issued by controller's office employees for collections made at various times during the event. Subsequent to the 2009 Festival of the Lakes, officials were instructed these items were to be retained for audit. For the 2010 Festival of the Lakes, we expect officials to retain the proper documentation.

Concessions Agreement
The agreement between the Hammond Fire Fighters Association and the Hammond Parks and
Recreation states in part, "The Fraternal Order of Police and the Hammond Fire Fighters Association
have agreed to split 22% of the profit from the 2009 Festival of the Lakes beer concessions after product
is paid for . . ." Per the summary report, the total beer concessions were $108,275.75. The amount
remitted to the Hammond Firefighters per the ledger was $27,472.10, or approximately 25%.
Officials and employees are required to use State Board of Accounts prescribed or approved
forms in the manner prescribed. (Accounting and Uniform Compliance Guidelines Manual for Cities and
Towns, Chapter 7)

IC 5-15-6-3(f) concerning destruction of public records, states in part: "Original records may be disposed of only with the approval of the commission according to guidelines established by the commission."

Supporting documentation such as receipts, canceled checks, tickets, invoices, bills, contracts,
and other public records must be available for audit to provide supporting information for the validity and
accountability of monies disbursed. Payments without supporting documentation may be the personal
obligation of the responsible official or employee. (Accounting and Uniform Compliance Guidelines

Manual for Cities and Towns, Chapter 7)
Payments made or received for contractual services should be supported by a written contract. Each governmental unit is responsible for complying with the provisions of its contracts. (Accounting and
Uniform Compliance Guidelines Manual for Cities and Towns, Chapter 7)