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Indiana State Board of Accounts reissued its audit report Wednesday on the town of Winona Lake for 2019-22 to remove the “conflict of interest” comment regarding Councilman Jim Lancaster under the town council section.
The original compliance report - which found numerous issues by the town’s elected officials and employees ranging from poor record keeping to misuse of town credit cards and town funds paying for employees’ personal items - was dated Thursday, June 19.
The conflict of interest comment was removed after it came to the ISBOA’s attention Lancaster’s conflict of interest statement was filed with the ISBOA under an incorrect name. The report was then also reissued. Failure to file a conflict of interest statement can potentially lead to a felony criminal charge, the original report stated.
In a telephone interview Thursday, June 26, Jennifer Gauger, chief of staff for the ISBOA, explained, “Yesterday, we were notified by the town attorney who contacted us to let us know that there was a conflict of interest filed, but it was filed under someone else’s name so we could not locate it, but once we got the name of the other person, we were able to find the conflict of interest, and, again, they notified us yesterday of this. We do an exit conference and they have a time to respond. We would have taken it out whenever we learned of it, but we just learned of it yesterday.”
If there is a discrepancy in a report, she said they have an exit conference with the government unit. Gauger said they ask the unit to let them know what they see, think or if they disagree with something.
“We hold all reports for at least 10 days to file an official response after that exit conference if they want to file a response,” she said. “That typically gives us enough time if there are ever any discrepancies or things that the unit would like to talk about a little bit further. That gives us an opportunity to do that.”
After being notified Wednesday of the inaccuracy, she said they were able to verify the inaccuracy and make the change.
The compliance report identifies issues of noncompliance and raises concerns, Gauger said. “We’re a reporting agency so we do turn that over to the town. We do ask that they correct those issues, and then during our next audit we’ll go in and verify that those changes have been made,” she said of what steps come next.
The next audit for the town of Winona Lake will depend on a number of factors, Gauger said, as an audit for any unit depends on several factors.
“I would say the most important factor is the amount of federal spending. And so if there is a significant amount of federal spending, they typically require an annual audit, so a lot of the larger towns will be audited every year. But some of the smaller towns then we’re going to audit on a risk-based cycle,” she said.
Gauger said they have a variety and will have the units do a risk questionnaire.
“We look at a variety of factors and will schedule accordingly.”
Further explaining the risk-based cycle, she said if a unit didn’t require an annual audit, the ISBOA will look at if a unit is high risk or not.
“For example, if they had a lot of audit findings on the previous audit, that would, in our eyes, increase the risk of the unit. They would have a more frequent audit cycle,” she stated.
By statute, all units are audited based on risk, not to exceed four years.
“So if they’re not on an annual cycle, we would look at them no less than every four years, but, again, based on risk, that could be every year, could be every other year,” she said.
The length that an audit takes depends on a variety of factors, such as condition of records of the unit.
“Sometimes the condition of records are really rough and it takes us, if we need it, a long time to go through it,” she said, and there’s a lot of time spent on putting the report together and reviewing it. “... It really depends.”
All reports can be found on the ISBOA website at http://www.in.gov/sboa/.
