Auditor general to probe West York's Liquid Fuels Fund
The state Auditor General's Office will examine West York’s Liquid Fuels Tax Funds after a recent report highlighted problems with the borough's 2016 allocation from PennDOT.
“I had the luxury of being contacted by the Auditor General’s Office, after I had contacted him,” Mayor Shawn Mauck told council members and about two dozen residents during a Monday, July 16, meeting.
“They will be conducting a triannual audit of the Liquid Fuels Fund, and what it will show you is that even though there might have been a little bit of bumbling around, there was no mismanagement of funds,” he said.
York-based accountants Kochenour, Earnest, Smyser & Burg noted in the 2016 annual audit that the borough had a “large amount of errors, misstatements, missing records and lack of documentation for transactions."
Combined with "a lack of oversight and supervision by the governing body and existing management at the Borough," that led the auditors to conclude "the financial statements are materially misstated and do not present fairly the financial position of West York Borough.”
The firm listed 11 deficiencies, leading with a problem related to the borough’s 2016 Liquid Fuels allocation from the state Department of Transportation.
The auditors indicated that they confirmed with the state Department of Transportation that it had sent the borough’s $107,333.77 allocation for the year.
Yet, they wrote, “the amount was not deposited into the Liquid Fuels PLGIT Account during 2016. We could not trace the receipt of this amount directly due to problems with cash receipt documentation …”
Each year the state distributes Liquid Fuels money to municipalities based on their populations and miles of eligible roads, according to PennDOT.
The money can only be used on certain projects, such as road and bridge improvements, PennDOT communications director Rich Kirkpatrick said. He explained that 20 percent of an allocation can be used to purchase major equipment for use on roads and bridges.
Kirkpatrick said municipalities are required to deposit Liquid Fuels funds into a “bank account designated for Liquid Fuels. And other funds may not be comingled with these funds.”
PennDOT records show whoever deposited the check did not endorse the back of it, according to Kirkpatrick. “It was marked for deposit only WYB General Fund.”
Council members in March voted 7 to 1 to research whether they should hire a forensic auditor to investigate the municipality's finances, but after The York Dispatch published a report about the borough’s two most recent audits, the auditor general reached out to the borough, Mauck said at Monday's council meeting.
The local auditor looks at the borough's full financial picture but does not render any fines, fees or penalties based on its findings.
While the Auditor General's Office can only look at how the borough spends state-allocated funds, such as the Liquid Fuels money, it would refer any findings of wrongdoing to law enforcement, according to Amy Gulli, a senior report writer with the office.
Auditor General Eugene DePasquale's office has the authority to audit the records of any public agency that receives state money "to satisfy the department that the money received was expended or is being expended for no purpose other than for which it was paid," his office wrote to the borough in a letter dated July 11.
Mauck was an auditor in DePasquale's office until he resigned last year to make a run for state office. He lost the Democratic primary for the state's 28th Senate District in May to Judith Higgins.
Mauck said he's pleased the borough won't waste taxpayers' money on hiring a forensic auditor. A forensic audit can be used in court to show criminal action.
The Auditor General’s Office will make its findings public, according to the mayor.
West York Borough officials will not be involved in the Liquid Fuels Fund audit, he said, other than supplying “the appropriate and sufficient documentation to do the independent audit.”
“When it is completed, it will be acknowledged by this council, myself, and it will be a public record for all of you to read,” Mauck said.
The Auditor General's Office is going to collect all necessary information from Jan. 1, 2016, to Dec. 31, 2017, according to a second letter to the borough.
The office noted it is seeking the following 2016-17 records:
- Checkbook, bank statements and canceled checks or check images (front and back)
- Savings account(s) and/or investment records
- Supporting documentation for any refunds, reimbursements and/or transfers
- Receipts and disbursements journal and/or general ledger
- All original invoices covering expenditures. Also bank statements and canceled checks or check images (front and back) for account from which checks are written, if transfers are made to another account
- Proof of advertising, bids received and contracts
- Documentation for written or telephonic price quotations
- Documentation for purchases from contracts of Council of Governments, COSTARS, etc.
- All records pertaining to County Aid projects
- PennDOT approvals and completion reports for all applicable projects
- Payroll records and daily time sheets which indicate type and location of work done, if expended from the Liquid Fuels Tax Fund. Also, bank statements and canceled checks or check images (front and back) for account from which payroll checks are written
- Documentation supporting remission of payroll taxes to the proper authorities, if any payroll is expended from the Liquid Fuels Tax Fund
- Loan/lease agreements, including amortization schedules and complete payment histories, if any payments made by the Liquid Fuels Tax Fund
- Minute book(s) covering the examination period to the present
- Heavy equipment inventory and titles to all road equipment and/or current insurance policy
- Fuel dispensation records, if fuel purchased by the Liquid Fuels Tax Fund
- Audits, attestation engagements, or other studies involving the Liquid Fuels Tax Fund
Mauck noted at Monday's meeting that West York officials take their jobs seriously.
“I sure take mine seriously, as mayor of this town, and I rest assure to all of you, that despite any of our shortcomings, as a group we try to do the best we can for the public,” he said.