Auditor: More 'problematic credit card spending' at Village of Blanchester

BLANCHESTER, OH (FOX19) - The Village of Blanchester's failure to maintain receipts for more than $7,000 in credit card purchases yielded audit citations from the state for the second audit in a row, Ohio State Auditor Dave Yost announced Tuesday.

The audit of the Clinton County village of 4,256 people also uncovered $280 in prohibited credit card purchases, according to a news release from Yost's office.

"A report released today names Assistant Utilities Director Jim Myers responsible for the unsupported and improper spending, which occurred in 2015 and 2016," the release states.

"Blanchester officials have again demonstrated an inability to use credit cards responsibly," Yost said in the statement. "It's time to take the necessary steps to prevent wasteful spending and ensure a complete record of every transaction."

Reached for comment Tuesday morning, Blanchester officials said they were preparing a statement that would be released later in the day.

The audit flagged 51 purchases totaling $7,467 that lacked receipts to prove they served a proper public purpose, according to Yost. Through other means, auditors determined that $7,023 of the spending was allowable, but they could not validate the remaining $444.

Another two purchases totaling $280 were supported by receipts, but they did not meet the standards of a proper public purpose, Yost contends.  The spending consisted of $255 in clothing purchases at Field & Stream and a $25 membership fee for the Oceanaire Seafood Room in Washington, D.C.

Blanchester's board of public affairs, which oversaw the spending, did not have a credit card policy in place at the time of the purchases, according to Yost.

The board approved a policy on Feb. 23.

Auditors issued a $724 finding for recovery against Myers because he approved the credit card invoices and submitted them for payment. He repaid the village on May 21, 2018.

The village's previous audit, released in March 2017, ordered Myers to repay another $3,411 for problematic credit card purchases made in 2013 and 2014, records show. He repaid that amount in January 2017.

The previous audit also cited the village for using the Electric Fund instead of the Water and Sewer funds to pay the salaries of utility employees, according to Yost.

Because the village has yet to end the practice, the Water and Sewer funds owe $673,346 to the Electric Fund as of the end of 2016, the audit found.

special report released by the Auditor of State's office in July 2017 highlights the risks local governments face when they fail to institute and enforce basic credit card policies.

Since 2011, more than $1.2 million has been stolen or misspent at Ohio governments through credit card abuse, according to Yost.

With his support, state lawmakers passed legislation requiring local governments to establish policies regulating credit card use.

The Village of Blanchester released the following statement:

"Due to the fact that the 2013-2014 Blanchester audit was not completed and released until 2017, Blanchester lacked sufficient time for staff to improve upon problematic weaknesses in credit card payment processing. Obviously, by that time, both 2015 and 2016 fiscal years' books had closed, and the window of time to improve upon processes for those years in question had passed. Unfortunately, this in turn managed to carry some of the same findings over to the 2015-2016 audit to a lesser degree since plans were underway in the beginning stages to correct relevant deficiencies. Overall, there was a vast improvement between the 2013-14 and 2015-16 audits confirmed by state auditors. Further actions have been implemented to remedy crucial accountability shortcomings going forward. The Village of Blanchester adopted credit card policies and additional compliance measures in 2017, and Council is hopeful this will greatly reduce these opportunity areas in time for the next audit. Additionally, the Village of Blanchester has taken great strides to increase transparency including joining the Ohio Treasurer's in April 2018."

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