State auditor 'hid it'

MILAN — A state audit of Milan's finances underreported how much money was unlawfully paid to employees in 2020 and 2021, according to a complaint filed with the state auditor's office. The audit, which was finished earlier this year and posted at the state auditor's website in mid-April, stated that $847 in unlawful payments were made to employees. But the actual amount is about 20 times higher than that, according to audit work papers village resident Mary Bruno obtained through public records requests to the state auditor. "The overall total in personnel services that has not been addressed and hid exceeds $15,000, yet, there is no findings For recoveries or public records available explaining why," Bruno wrote in a complaint she sent to the state's chief deputy auditor Robert R. Hinkle on Friday. "They hid it," she said. Losses greater than reported Bruno, who previously served as the village's fiscal officer, contends the 2020-21 audit contains "many blatant illegal expenditures and/or payments" that were not identified in the audit. She made numerous records requests to the state auditor for records related to the audit. The unlawful payments auditors identified through those records that the state auditor failed to disclose include: • Employees being paid for fringe benefits they are not entitled to receive • Employees overpaying themselves • Employees paying themselves for leave time they have not earned • Payments made to employees that go against the village ordinances and/or state laws There also were 120 errors in misstatements not addressed in the audit, mostly used for fund adjustments when money wasn't put where it should have been, she said. There were also about 10 pages of errors identified in financial states that include weakness in reporting, cash reconciliation processing and overpayment to employees. The audit results the auditor's office posted for the village are misleading, Bruno said. It's unlikely anyone could discern the real losses in taxpayer funds without making records requests the same as she did. The auditor's work papers that she asked for and received revealed close to $20,000 in improper payments, she said. Nothing to see here It's unknown why there was such a disparity between the amounts disclosed in the audit and the amounts disclosed in other records. It's also unknown why the amounts employees were required to pay back were less than what was paid out unlawfully. Records from the auditor's office that likely would explain the discrepancies were not provided. The auditor's office cited attorney/client privilege as the reason for withholding those documents but did not offer any further explanation. It's unclear why there was a need to shield the information, or how that exemption is being applied. "I am assuming if an auditor has identified so many illegal expenditures, speaks to their attorney, redacts the information and claims attorney-client privilege, there might be something amiss," Bruno wrote in the complaint. "Why would an auditor need to speak to their attorney when the theft has been identified?" Her attempts to work with village officials to get a clear accounting and get the mistakes fixed "fell on deaf ears," she said. "Everything I sent to the state auditors, I went to the village of Milan council meetings with first," she said. "No one wanted to hear what I had to say." Bruno said she's not sure if village officials know or even understand the extent of the unlawful payments. She said nothing has ever been done to address the issues. The village also was billed about $9,000 for extra hours state auditors used to review the discrepancies, Bruno said, bringing the village's losses to closer to $29,000, in all, during the two-year period. "They uncovered so much from what I sent in, uncovered so much from the work papers, it's crazy. But, they didn't use any of it," she said. Do it again Bruno said the state is currently auditing village finances for the 2022 and 2023 period and likely will find more illegal payments. She wants to make sure the auditor's office fully discloses findings in the prior audit and for the audit that is pending. "I would like to know from you how the audit will proceed to provide the public with a full explanation in these matters," she told Hinkle. "At this point, it appears an independent investigation is needed." Bruno said she's concerned the 2022-23 audit will mirror this past audit since nothing's been resolved or changed. "How will this audit and issues be handled?" she asked Hinkle. The Register asked the state auditors questions regarding Bruno's complaints, including inquiries about whether the complaint will be investigated, the repercussions of allegedly misreporting funds and for details on their attorney/client policy. "We received a number of complaints concerning alleged misuse or misappropriation of public money by village of Milan employees. We take such complaints very seriously. The auditor of state's office reviewed each, to the point that it delayed the completion of the village's most recent audit," a spokesperson for the state auditor's office told the Register. "Our work papers and report speak for themselves. The 2020-21 audit for the village of Milan is closed. Any further issues or concerns brought to our attention will be addressed in future audits." The Register on Tuesday requested an interview with state auditor Keith Faber. Village officials don't respond to inquiries about the unlawful payments.