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Audit hints about scam



Published: Thu, June 14, 2001 @ 12:00 a.m.



The mayor said the audit contains very serious allegations.

By AMANDA C. DAVIS

VINDICATOR TRUMBULL STAFF

WARREN -- A special state audit of the city water department hints that a scheme could be responsible for missing money.

State auditors have issued a finding for recovery of $26,036 against the department's former head cashier, Debra D. Dunewood.

She has not been charged with a crime.

Her delay in depositing receipts, along with an indication that cash was not being deposited, shows & quot;a potential lapping scheme & quot; to divert cash and delay deposits until & quot;sufficient subsequent receipts are accumulated to cover the amount diverted, & quot; the audit says.

The Vindicator obtained a copy of the audit Wednesday. It was to be released to the public today.

Mayor Hank Angelo said the audit contains very serious allegations.

Background: The city asked the state for the audit of April 2000 because money was missing.

City police and the FBI are looking into allegations in the audit, and police have said they will likely seek department records from other months.

Water department employees are bonded, the mayor said, so public money will be replaced.

The audit says the department does not require its cashiers to be individually bonded; they are covered under a blanket dishonesty bond, which applies to all city employees, with a $50,000 limit.

That amount is inadequate, the audit says, because seven out of 20 days reviewed had collections which exceeded the amount of bond coverage, ranging from $1,646 to $276,530.

The auditor's office recommends the city bond the cashiers with an amount equal to the average daily collection, or obtain a blanket dishonesty bond in a higher amount.

The audit notes five days of utility cash receipts which were not deposited into any city account, totaling $23,281. Miscellaneous cash receipts for 13 days were also not deposited, totaling $2,755, it says.

Not available: Dunewood left work April 20 and never returned, officials say. Auditors scheduled two interviews with her, but she did not show.

She was unavailable Wednesday.

Deposits should be made daily, the audit says, but between four and 30 days lapsed between the time Dunewood recorded and deposited receipts, leading auditors to their conclusion of a possible scam.

While reviewing Dunewood's personal accounts, the audit notes she made cash deposits totaling $4,464 in 15 bank transactions between July 1, 1999, and April 30, 2000.

& quot;This could indicate that Ms. Dunewood may have misappropriated funds prior to April 2000, & quot; the audit says.

Who's suspended: Water office manager Richard Griffing is on suspension without pay through July 9 because the city found him guilty of gross neglect of duty, dishonesty and nonfeasance regarding the missing money.

The union contract governing Griffing's employment says the city has 10 days to discipline him from the time it first becomes aware of such charges.

Angelo said other supervisors who oversee cash-handling employees may be involved in missing money, but are not governed by union regulations regarding discipline within a certain time frame.

He did not indicate which supervisors he was talking about. & quot;We're not relieving anybody of culpability at this point, & quot; Angelo said.

As office manager, Griffing is responsible for overseeing collection and deposit of revenues and enforcing a policy that says the money was to be deposited within 24 hours. The city has determined he did not enforce the rule between April 3 and May 1, 2000.

Even though he knew of the 24-hour policy, Griffing told state auditors no such policy exists, the audit says. & quot;There is confusion within the department concerning the official policies ... for processing receipts. & quot;




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