Fort Thomas leaders are facing renewed questions about nearly $1 million in unaccounted taxpayer money after the city released the final version of a forensic audit that found no evidence of fraud but blamed “very bad bookkeeping” for the problem. (Provided)
The issue first surfaced last October, when the city discovered major accounting mistakes had left $322,000 unaccounted. City Council members ordered a forensic audit to determine where the money went.
A draft version of that audit released in September found the unaccounted amount had grown to about $713,000. The money primarily involved federal COVID-relief funds received by Fort Thomas and the city’s share of opioid settlement dollars.
Late last week, city leaders discussed the final audit during a special meeting. Josh Shilts, with the auditing firm Dean Dorton, said the review did not find signs of fraud or wrongdoing.
“In performing our procedures, we did not identify unauthorized disbursements, nor did we identify any monies that should have been received that weren’t received. There was no evidence of that,” Shilts said. “We found bad bookkeeping. We found the fact that you know there was no reconciliation. There was not consistency in journal entries on how we recorded certain items.”
However, the audit did not track down individual missing expenditure entries, meaning the city will need to write the missing funds off as it balances its books. Shilts argued it would be too expensive to continue investigating.
Mayor Andy Ellison and City Administrator Matthew Kremer did not respond to messages seeking comment, including an email asking what steps they are taking to make sure it doesn’t happen again and whether the city is closing the book on the investigation and ending efforts to determine what specifically happened to the missing money.
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The audit’s release comes as the mayor and City Council face stiff opposition while running for re-election next month. One of the candidates running for council, Ally Alessandro, said she hopes the audit will quell rumors about criminal wrongdoing, but she believes it did not go far enough.
“I think that to some extent, somebody needs to come in independently and audit the city—what management, what’s kind of gone on, who’s had access to all the information and the finances, et cetera—to determine what’s really happened in the last decade or so,” Alessandro said.
The audit also identified other issues, including an interest-free forgivable loan to an area restaurant group to open a new place downtown that was never entered on the books.
The audit included a series of recommendations, including improving payroll processes, which have been a major issue in the past. It also highlighted the fact that the city has already implemented some of those recommendations, including a monthly reconciliation of all its accounts, which hadn’t been done before.
The audit also referenced previous warnings about the city’s accounting problems and noted other factors affecting city operations, including the city’s previous external auditor becoming terminally ill, the finance director at the time working part time from home, and the previous mayor falling ill last year and needing to be replaced.
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