Barb Hackman
A report by state auditors has identified a series of accounting discrepancies, insufficient internal controls and penalties assessed against Bartholomew County government — including an unexplained cash shortage of more than $300,000 and hundreds of thousands of dollars in IRS penalties and interest.
The Indiana State Board of Accounts report, which covers calendar year 2023, found that the bank reconciliation in the Bartholomew County Treasurer’s Office showed an unexplained cash short of $300,924 as of Dec. 31, 2023.
However, state auditors found no evidence of criminal activity and plan to revisit the cash short during the next audit, officials said.
“Whenever our audit teams are out there and they come across anything that is suspicious or they feel could be something more, they will call in our special investigations team to take a little further look, and that wasn’t done here,” SBOA Chief of Staff Jennifer Gauger told The Republic.
Beth Kelley, SBOA deputy state examiner, said posting errors in the ledger can lead to discrepancies between the ledger and banking records, but that “doesn’t always necessarily mean that there are funds missing.”
“It could just be a clerical error, maybe a missed posting, something like that,” Kelley said.
Bartholomew County Treasurer Barb Hackman did not return a phone call seeking comment on the report’s findings.
The report also found that the Bartholomew County Auditor’s Office paid $302,723 in IRS penalties and interest in 2023 and made several late payments to utility vendors.
The report states that county officials “made numerous attempts” to obtain more information about the IRS penalties and interest including multiple requests to have the charges waived or refunded.
IRS representatives allegedly were unable to explain the basis for the penalties, which were labelled as “miscellaneous,” but indicated that there had been additional penalties and interest assessed against the county that remained unpaid, the report states.
County officials allegedly requested a transcript of all IRS civil penalties but did not receive the records before the report was issued, meaning that SBOA “was unable to determine the outstanding balance.”
The report also found that the county paid $1,122 in late fees in 2023 to utility vendors, including at least 52 invoices that were paid late.
Bartholomew County Auditor Pia O’Connor also did not respond to requests for comment on the report’s findings.
“Officials and employees have the duty to pay claims and remit taxes in a timely fashion,” the report states. “Failure to pay claims or remit taxes in a timely manner could be an indicator of serious financial problems which should be investigated by the unit. Additionally, officials and employees have a responsibility to perform duties in a manner which would not result in any unreasonable fees being assessed against the unit.”
Other findings in the report included that county officials misclassified its lease with the Bartholomew County Building Corporation.
As a result, the county overstated its reported long-term debt balance by $6.2 million and understated its annual lease payments by nearly $2 million.
Auditors also identified errors in the county’s annual financial report related to grants and capital assets, according to the report.
The Homeland Security Grant Program expenditures were omitted, which understated expenditures by $212,216. Other grants had individually immaterial errors which resulted in misstatements of expenditures of $627,615.
Other errors included incorrect assistance listings numbers, program names and identifying numbers.
Additionally, supporting documentation provided by the county related to its capital assets “was not accurate because the county had not conducted a physical inventory during the last two years, and the list provided had not been properly updated,” the report states.
