State audit of West York's Liquid Fuels funds expected by end of month
- A forensic review seeks outside documentation, which can include, for example, credit card, sewer and vendor transactions, according to an expert.
- There was no motion or vote taken on hiring a forensic auditor.
West York officials continue to explore the hiring of a forensic auditor, even as the state Auditor General's Office prepares to release a report on its examination of the borough's Liquid Fuels funds.
A forensic audit has been on the table since 2017, when council members saw the borough’s 2016 financial audit, which was returned to them with 11 deficiencies noted.
Most of them punctuated West York’s lack of proper bookkeeping and internal controls, and one highlighted the borough's lack of oversight in managing state Liquid Fuels funds.
“It feels like at times when we talk about the forensic audit … we sound like we’re grasping at straws,” said Brian Wilson, who made the motion to talk to an expert. “Trying to give you specifically something we want to look at, I can’t answer that question.”
That expert — Andrew Kehl of RKL LLC in Lancaster — addressed the council Monday, Aug. 6.
Unlike a state audit, which the borough recently underwent, and an annual financial audit, a yearly state department of community and economic development requirement, a forensic audit examines more than borough documentation, Kehl said.
It seeks outside documentation, which can include, for example, credit card, sewer and vendor transactions, he explained.
A forensic review would be tailored to interview "specific individuals" and focus on "specific concerns," Kehl continued.
Its results could show no wrongdoing; wrongdoing that doesn’t produce enough evidence for criminal or civil action; or wrongdoing with enough evidence to support criminal or civil action, he said.
RKL sent the borough a proposal in April not to exceed $50,000, Kehl noted. That is the capped amount even if his firm would detect possible fraud and need to continue investigating, he said.
The reasons for fraudulent behavior are often opportunity — meaning there’s some sort of incentive or motive, such as being unhappy with one's work environment — or external pressures, such as a loved one being hospitalized and needing to pay medical bills, Kehl told the council.
“Or, we don’t learn until after the fact why they did what they did, and why they think it’s OK,” Kehl said. “And, honestly, we may never be able to find that out.”
There was no motion or vote taken at Monday's meeting to hire a forensic auditor.
“We haven’t made a determination on that yet,” Council President Mary Wagner said in an email.
State audit: The state Auditor General's Office recently combed through the borough's Liquid Fuels funding. The office investigated "necessary" borough documentation from Jan. 1, 2016, to Dec. 31, 2017, according to a state letter sent to the borough.
“Once the audit is finalized, it will be released to the public,” said Amy Gulli, a senior report writer with the office.
The Auditor General’s Office can’t comment on its initial findings, she explained, though she confirmed the full report is expected to be released by the end of August.
In other news: Council members held a special meeting Monday, July 23, to offer Linda Diaz a part-time job as borough manager. Diaz resigned as borough manager in July but agreed to remain interim manager until the borough hires a new one.
She’s being paid $25 per hour with no benefits, borough solicitor Mieke Driscoll wrote in an email.
“There was also a motion for her to continue to serve as secretary and treasurer until a replacement is appointed,” Driscoll explained. “She will also continue to serve as zoning officer until a replacement is found.”
After the state launched an audit of the Liquid Fuels funds, Diaz said, she instituted a direct deposit policy to prevent any future problems with state allocated money being mismanaged.
The borough's accountant, York-based Kochenour, Earnest, Smyser & Burg, reported that the $107,333.77 state Department of Transportation 2016 Liquid Fuels funds were "not deposited into the Liquid Fuels PLGIT Account during 2016."
"We will no longer receive a check for (Liquid Fuels); it goes straight to the bank," Diaz said.
Diaz also said she completed uploading West York Borough Council’s 2017 meeting minutes online in a Google doc. The council voted to approve all of the 2017 meeting minutes Aug. 6, and they can now be found on the borough’s website.