In the world of government finance, malfeasance is the only thing worse than mismanagement.
The most nefarious danger of the latter is that it’s sometimes used to conceal the former. And even when it’s not, public confidence and trust in the intentions, competence and credibility of the government unit and its public officials is eroded.
That brings us to the recently released results of an audit of the Anderson Township Trustee Youth Center by the Indiana State Board of Accounts. The audit covered Jan. 1, 2016, through Dec. 31, 2018, during which John Bostic was the township trustee.
“I’ve not stolen any money and did everything right,” Bostic told The Herald Bulletin. “This is a witch hunt. When I was in office there was never an audit problem. This all happened after I left the trustee’s office.”
Still, it doesn’t look good. Not at all.
Among the audit’s troubling findings:
• A lack of evident internal controls such as “oversight, review, or approval process over the receipt and disbursement of township funds.”
“The Trustee was the sole person responsible for all financial processes,” the audit reads. “The failure to establish these controls could have enabled material misstatements or irregularities to go undetected.”
• Payments to vendors without supporting documentation. In 2018 alone, 11 such payments were made, the audit reported.
• Failure to properly document and report wages paid to employees. According to the audit, some employees’ wages weren’t listed on W-2s, some employees were paid from the wrong fund and some time reports and invoices weren’t filed.
The audit includes a description of township assistance funds totaling $49,894 being used to pay for “employee payroll, insurance, transportation and (Youth Center) camp activities costs and fees.” But the description of the funds’ disbursement, according to the audit, was for “direct poor relief.”
Forty-three times in 2018, records of employee compensation weren’t filed, the audit says. Twenty-six of those instances accounted for $29,978 in compensation to the township assistance program director.
Payroll taxes were not withheld from a $500 holiday bonus paid to employees, according to the audit.
• Co-mingling of donation funds.
• Failure to deposit a check in a timely manner.
• Failure by Bostic to file a conflict-of-interest declaration.
• Failure to provide written documentation for use of money in a separate bank account maintained for funds provided by the city of Anderson.
• Funds used for purposes outside the fund’s designated uses. An appropriation of $50,000 was placed in the Township Assistance Fund for the Youth Center camp for each calendar year, a purpose not allowed for such funds under state law, according to the audit.
Despite the sloppy financial management of the Youth Center, the audit doesn’t request any reimbursement of funds. Nor does it suggest further investigation.
Mike Shively, who took office in 2019 after defeating Bostic in the November 2018 election, said the township advisory board would approve a system of complete internal controls within two months.
The community will be watching closely as the Youth Center tries to recover from the egregious financial mismanagement of 2016-2018 and attempts to win back the public’s trust and confidence.