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August 7, 2022

Assumption Mayor Looks to Village As Deep Pocket In Possible Legal Action – 2019 Audit Findings Not Corrected in 2020

By Kirk Allen & John Kraft

On August 8, 2021

Christian Co. (ECWd) –

After numerous tips streaming in regarding the Village of Assumption Illinois, we decided to attend a special meeting held a couple of weeks ago.  To say it was entertaining would be an understatement.  Our video of this meeting can be viewed at this link.

While the Mayor rambled on for quite some time with insinuations and accusations, it became clear as the meeting progressed he was not in favor of transparency and claimed the attorney for the village advised against videotaping the meetings because of watchdogs from Arkansas.

One comment of interest was the Mayor insinuating he had grounds for a lawsuit against the village.  Turns out, he admitted his target would be the village rather than the clerk in her individual capacity because the Village is the one with the money. For the record, an elected official who makes an actionable statement in their private capacity does not open the door for the Village to be on the hook for those statements.  If the Mayor’s attorney believes otherwise, we would suggest he find a better attorney.

While some folks have been denied public financial records in FOIA requests, we find the available audits from the Comptroller to be an example of failed leadership.

According to the 2019 Audit:

  • The City did not operate within the legal confines of its budget. Expenditures exceeded budgeted amounts in the Community Development Fund by $429,963, the IMRF Fund by $9,872 and the TIF Fund by $20,712.
  • The City does not have policies regarding custodial credit risk, interest rate risk, concentration of credit risk or foreign currency risk.
  • Custodial Credit Risk – Custodial credit risk for deposits is the risk that in the event of a bank failure, the City’s deposits may not be returned or the City will not be able to recover collateral securities in the possession of an outside party. As of April 30, 2019, $92,790 of the City’s $2,384,618 ($1,899,618 in demand, NOW and savings accounts and $485,000 in certificates of deposit) is uninsured and uncollateralized; the remainder is insured or collateralized with securities held by the pledging financial institution in the name of the City.
  • The City had a deficit fund balance in the TIF Fund of $39,700 for the fiscal year ended April 30, 2019

One would think such findings would all be corrected moving forward however that is not the case.  According to the 2020 audit, the following was identified:

  • The City did not operate within the legal confines of its budget. Expenditures exceeded budgeted amounts in the General Fund by $93,729, the IMRF Fund by $18,965 and the Playground and Recreation Fund by $5,969.
  • An adequate segregation of incompatible duties does not exist. Access to physical assets, to the related accounting records and to all phases of transactions must be segregated between different individuals. This condition is inherent in small local governments with a limited number of office personnel. This condition increases the possibility that errors, irregularities or fraud may occur and not be detected on a timely basis.
  • The City had a deficit fund balance in the TIF Fund of $7,040 for the fiscal year ended April 30, 2020.

In regards to the 2020 audit where it was found the City did not have adequate segregation of incompatible duties, Management’s response was as follows:

  • Due to their limited financial resources, the City cannot hire enough employees to adequately segregate incompatible duties. However, the Board of Alderman closely monitors expenditures to help mitigate the risks associated with not segregating incompatible duties.

We point this out because there was no such finding in the 2019 audit, which raises questions.  Did the auditors believe in 2019 the City had enough employees to adequately segregate incompatible duties?  If so, what happened to those employees to cause the finding in 2020?  Or, is it possible the Auditors failed to identify the same issue in 2019?  What changed from 2019 to 2020?

If a city is not going to operate within the confines of the budget as required by law, why even adopt a budget?

A copy of the 2019 and 2020 audits can be viewed below.

19Audit01101030_01
20Audit01101030_01

 

 

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1 Comment
  • John K
    Posted at 11:49h, 09 August

    “Or, is it possible the Auditors failed to identify the same issue in 2019?”

    Was once told by a private sector auditor who did contract audits for OAG they have a “game plan” with different emphasis in each cycle, and that at the end of the audit they do a “post game review” to determine what should be looked at in the next audit. It is possible that in 2019 they didn’t have the time / funding to look at “inadequate segregation of functions.” Which, by the way, is auditors telling public officials they either need to increase spending / reduce programmatic spending to increase administrative spending. Technocrats overruling elected officials.

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