SOPA’s 2020 audit returns with noncompliance findings


By Patrick Keck - pkeck@aimmediamidwest.com



SCIOTO — After failing to submit paperwork for its audit of 2017-2018 financial records, the Southern Ohio Port Authority finally received its regular audit Tuesday.

Several noncompliance findings were documented in Ohio auditor Keith Faber’s report, following similar findings in the 2016 audit which denoted instances of mistakenly-denoted statements and material weaknesses.

“I made the comment one day that the state auditor would find all this very interesting and I believe the auditor has spoken,” said Commissioner Bryan Davis during Thursday’s Scioto County Commissioners session. “The actions of the former Port Authority, not all the members have been found to be questionable and I think that was putting it lightly.”

According to the report, SOPA’s board of directors failed to approve its 2018 budget, resulting in no appropriated expenditures for that year. This missing budget, “restricts management’s ability to plan, monitor and control expenditures, and could result in spending in excess of available resources,” the document stated.

Excessive appropriations were also reported for both years, totaling $100,638 in 2018 and $77,730 in 2017 which Faber owed to inadequate policies and procedures.

Not aware of these actions when they took place, Robert Horton, present during the Commissioners’ meeting Thursday, said he began his review of the files after taking his present role as SOPA’s chairperson.

“I realized there were going to be a lot of problems,” said Horton, who has held the position since February 2018. “That was one of the reasons why it took over a year to complete this audit.”

Faber deemed the Port Authority “unauditable” in September 2019 following its failure to submit annual financial statements or provide the proper financial records needed for its biannual audit.

“Financial records must be organized and complete so that taxpayers remain informed of government spending,” Faber said in a press release. “Our Local Government Services team is ready to help should the authority need assistance correcting these deficiencies.”

No certification of funds were conducted after September 2017, which the audit said could lead to overspending and negative cash fund balances. Under Ohio Rev. Code 5705.41, prior certification is necessary in all cases with exception for “then and now,” blanket and super blanket certificates.

Horton and Faber owed these shortcomings to a rapidly changing administration staff, where multiple retirements created uncertainty as to who would fulfill certain responsibilities.

“They were retiring, resigning every day,” said Horton, who witnessed this transformation as a new board member in 2017. “They were dropping like flies; it was unbelievable. There was no smooth transition for that to take place.”

Under his leadership, Horton said considerable time and money went into making SOPA’s records auditable, where over $17,000 has been billed to the Post Authority and they are expecting another charge.

The 2020 audit found, in addition to the noncompliance citations, changes within its financial status between 2017 and 2018, where decreases in total assets, liabilities, operating costs and expenses occurred.

2018

2017

Assets

$1,105,319

$1,215,044

Liabilities

$310,911

$408,998

Operating Costs

$71,118

$843,031

Expenses

$100,638

$1,060,211

Not listed on the audit, reports came through in Faber’s management letter that SOPA used a credit card to purchase $71 on alcohol and $494 ontickets for Ohio State football games. An additional $523 of expenditures had no proof of whether or they were used for proper public purposes.

Two checks worth $75,000 and $25,000 were returned to their original private donors in 2017. These repayments, sent to the Scioto Foundation and the Southern Ohio Medical Center, were considered questionable by Faber.

“This is due to the fact that once monies are donated to a governmental entity, they are considered public monies and must be used in the capacity as stated above to be a proper public purpose,” wrote Faber in the letter. “However, since they were approved by the Board to be refunded, we felt they did meet the definition of allowable in these circumstances. However, these types of expenditure could raise questions as to their allowability if done in the future.”

In response, Horton said policies have been changed by the auditor’s office and they are now, “sticking to it to the tee.”

“As we stand here today, the Port Authority is 100% clean and all measures have been put-in-place so this will never happen again,” said Horton, adding that several unnamed former members were lucky to be indicted.

“We’ve streamlined the board, we do not have a credit card, we have separated all of our accounts to specific things we do,” he added, divided into four accounts.

In a statement addressed to Scioto County residents, SOPA promised to repay the $95,234 debt owed to the county and to move forward with requests for grants used on projects such as the environmental assessment of the New Boston Coke Plant and the $350 million-plus PureCycle solid waste project.

“These were very important issues that we had to make sure that we saved,” said Horton. “We did not let the rhetoric discredit or derail any of it and, believe me, it’s been tough because it’s been out there.”

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By Patrick Keck

pkeck@aimmediamidwest.com

Reach Patrick Keck (740)-353-3501 ext. 1931, by email at pkeck@aimmediamidwest.com, or on Twitter @pkeckreporter.

© 2020 Portsmouth Daily Times, all rights reserved.

Reach Patrick Keck (740)-353-3501 ext. 1931, by email at pkeck@aimmediamidwest.com, or on Twitter @pkeckreporter.

© 2020 Portsmouth Daily Times, all rights reserved.