On Tuesday, Ohio Auditor of State Keith Faber declared the Southern Ohio Port Authority “unauditable” after local port officials allegedly failed to submit annual financial statements and did not have their financial records available to commence their biannual audit.
“Financial records must be organized and complete so that taxpayers remain informed of government spending,” Faber said in a press release.
Before beginning the port authority’s regular scheduled audit, state auditors determined SOPA’s financial records were not available. Additionally, according to the auditor’s office, SOPA failed to submit annual financial statements and footnotes for fiscal years ending Dec. 31, 2017 and Dec. 31, 2018.
Faber’s office stated within 90 days of receiving the “unauditable” declaration, the port authority must revise their financial records and provide data necessary to complete an audit. Failure to bring accounts, records and reports to an auditable position may result in legal action, including the possibility of the state attorney general issuing a subpoena to SOPA officials to explain the condition of records.
The Attorney General also may file suit to compel officials to prepare and/or produce the required information.
Scioto County Economic Development Director Robert Horton, who chairs the SOPA board, did not return requests for comment on Thursday. Neither did Scioto County Board of Commissioners Chair Michael Crabtree.
According to the state auditor’s office website, the last audit of SOPA’s books was released in 2016 covering fiscal years 2013 and 2014. The audit noted several problems, including one finding for recovery against then SOPA Secretary-Treasurer Daniel Cassidy in the amount of $269.
The auditor’s office claimed the money was improperly used to pay for a dinner for board members, including the purchase of alcoholic beverages totaling just over $212. The audit report notes Cassidy later repaid SOPA the total $269.
The 2016 audit also included one noncompliance citation and two notices for material weaknesses.
Regarding the noncompliance citation, SOPA’s official response was as follows: “New board members and an executive director were appointed during the audit period. They have adopted and are following new procedures with respect to issuing certificates and purchase orders. However, unfortunately, there were some non-compliant transactions that took place prior to their appointments.”
The second material weakness finding states, in part, financial statements had errors requiring audit adjustment or reclassification. Those alleged mistakes included:
– Loans receivable in the amount of $124,000 were presented as accounts receivable in 2013 and 2014.
– The Jan. 1, 2013 beginning balance included a $60,000 liability the port authority was not liable for any longer.
– Accounts payable were understated by just over $60,000 in 2013 and 2014.
– Donated land in the amount of $155,580 was not recorded by the port authority in 2013.
There also were four other problems listed by the auditor’s office under the heading
“material weaknesses. “
According to the audit, SOPA ended 2014 with total assets of $1.1 million. SOPA’s present worth is not clear.
Auditor’s office spokesperson Allie Dumski said there are currently 12 or 13 governmental entities in Ohio listed as “unauditable.” She indicated while a finding of “unauditable” is not common, it apparently is not unheard of either. Dumski stated entities are moved on and off the unauditable list as problems surface and then are corrected. She declined to comment on whether any criminal charges eventually could surface.
According to Faber’s press release, the state’s Local Government Services section is available to port authority officials to assist in bringing records to an auditable condition. Local Government Services provides a wide variety of services to local governments, including reconstructing financial records and aid in the reconciling of books.
The auditor’s office removes an entity from the “unauditable” list once an audit is complete and released to the public.
Reach Tom Corrigan at (740) 370-0715. © 2019 Portsmouth Daily Times, all rights reserved.