Youngstown’s 2016 audit doesn’t include any noncompliance findings


Published: Wed, June 13, 2018 @ 12:05 a.m.

Report includes 11 recommendations for improving operations

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

The 2016 state audit of Youngstown’s finances is similar to previous ones, but for the first time in several years it doesn’t include any noncompliance findings.

A noncompliance finding is a violation of the law, according to the state auditor’s office.

The 2016 report – the most recent one available for the city – included 11 recommendations for improving financial operations with eight of them the same as in the 2015 audit.

In comparison, there were four noncompliance findings and 11 recommendations to improve how city government operates in the 2015 report. There were five noncompliance findings and nine recommendations in the 2014 report, and nine findings and 10 recommendations in 2013.

Among the ongoing issues is the city’s failure to deposit old unclaimed money – the city has outstanding checks dating back to 2011 – into a trust fund until claimed by its lawful owner; failing to establish a committee to meet with state auditors to discuss financial audits; not having a formal grant administration policy in place that could lead to noncompliance findings; not establishing an adequate system of internal controls such as providing city council with monthly financial reports; and not creating a computer disaster recovery plan to minimize the risk of loss of data after a potential computer crash.

Long-standing issues not included in the 2016 audit includes subsidizing the general fund with money from sanitation revenue because city council created a sanitation enterprise fund in November 2015, and giving water and wastewater money to private developers for economic development without reviewing the work done.

The latter issue was resolved when the city signed a contract in December 2016 with architect Paul J. Ricciuti to verify the completion of such work and that costs are specifically for water and sewer improvements.

“Things were resolved that were identified in previous audits as issues and some things still need to be addressed,” said city Finance Director Kyle Miasek. “The mayor has instructed that things be tackled so they don’t get repeated in future audits. The auditor’s office is also helping tackle some of the critical issues. Some issues are easier to do such as the computer recovery plan.”

Mayor Jamael Tito Brown added: “Nothing jumps out. We’re going to work on some of the recommendations to get better.”

The state auditor’s office performs an annual review of the city’s budget, usually lagging behind by more than a year.

Unlike previous audits, however, the 2016 report’s management letter states: “The auditor of state is conducting an investigation. As of the date of this report, the investigation is ongoing. Depending on the results of the investigation, results may be reported on at a later date.”

The investigation is connected to the 105-count indictment of Dominic Marchionda, a prominent downtown property developer, and his affiliated businesses.

The indictment, unsealed in October 2017, alleges Marchionda used a scheme to funnel at least $600,000 from city funds to himself through various companies.

The indictment also says an unnamed city official – a source with knowledge of the investigation says it’s former Finance Director David Bozanich – helped Marchionda in exchange for a $25,000 bribe in spring 2009.

Bozanich has said he did nothing illegal and hasn’t been charged or indicted.


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