NEW PALESTINE — An audit would be two-fold, find any wrong doing or mismanagement from previous leadership and set parameters and guidelines for the way future financial operations are handled by the town.
The New Palestine Town Council voted 4 to 1 in favor to accept bids from accounting firms to audit their sewer plant operations as well as look into town finances. Council vice president Clint Bledsoe voted against the measure saying any issues discovered wouldn’t amount to anyone being held accountable.
Bledsoe noted the Indiana State Police and the county prosecutor’s office have been looking into allegations of misconduct associated with former Town Manager Dave Book. Book ran an independent business out of the sewer plant for decades, without the council’s knowledge. County officials have yet to file any charges, but have asked state officials with the Attorney General’s office to look into the matter further.
Book passed in July 2020, but the council noted there are other former and current town employees who should be held accountable if any wrongdoing is discovered.
Council president Bill Niemier, along with council members Angie Fahrnow, Brandee Bastin and Chris Lytle approved the motion which is seeking bids for the cost of an audit.
“If there are things wrong you can’t just close your eyes to what has been found,” Niemier said, in response to Bledsoe’s reasoning for not supporting an audit.
Fahrnow, who brought the proposal to the council for approval, noted historically town council members have inquired data and financial records to gain an understanding of how money flows in and out of the sewer department; however, the requests have been ignored by past management.
Fahrnow said there was an illegal business running out of the sewer department for decades and money in the sewer plant was being moved around with knowledge of the council.
“That hole has not been plugged yet and we need to figure out what all happened,” Fahrnow said. “There are no checks and balances there because the abuse went undetected for so long.”
Niemier along with Fahrnow spearheaded an investigation to uncover the wrongdoing at the sewer plant and demanded Book be fired.
“Being new to the council, I am not completely confident of things that happened there in the past financially or otherwise,” Niemier said. “An independent audit might bring to light some items that we are not aware of.”
The council is estimating an outside audit could cost several thousand dollars, but feel it will be money well spent.
Council members had asked officials with the State Board of Accounts to look into the issue months ago, Bastin said. But they declined, saying they could not do anything until a previously scheduled audit of the town occurs within the next several years.
Bastin said it’s important for the current council to do their due diligence to make sure any issues are uncovered and checks and balances are put into place to make sure money coming in and going out will be kept track of and the type of issues they had with Book won’t happen again.
“The whole thing is very bothersome and I understand the reason for wanting the audit,” Bastin said.
Bastin was finishing up her first term with the council when it discovered Book was running a side business out of the sewer plant and said there were times the former council asked for but could not get reports on what was going on at the plant. They also had trouble trying to figure out where funds were going.
“Money in the sewer department has been moved without council approval,” Fahrnow said.
An example popped up recently when a current town employee approached the town’s manager Jim Robinson asking for permission to move $45,000 from an account at the sewer plant and said that’s what they’ve always done in the past. Robinson along with the council wanted to know where the money was going as the employee had no paperwork to back up a need to move funds.
“This kind of activity has got to stop,” Fahrnow said. “This inherently increases the risk of mismanagement, fraud, or simple human error.”
There has been no reconciliation associated with the potential irregularities from the Book era, Fahrnow noted, and that presents a significant risk to the town and everyone involved.
“We have had a significant inflow of additional revenue in this area with the sewage changes and again apparent limited oversight on the impact in this area,” Fahrnow said.
A vote of approval for an actual audit is expected to come later this spring after bids are collected and discussed.
