Lake County was removed from the State Board of Accounts unauditable list for its 2022 budget, but its audit report found issues with payroll management, the Lake County Sheriff’s salary, and the Lake County Jail’s commissary fund.

Lake County Council President Christine Cid, D-East Chicago, said in a statement that the council was pleased the 2022 audit was completed, though she acknowledged “there are a few things to address.”

“The county takes its responsibility to taxpayers seriously. Transparency and accurate book keeping are important,” Cid said. “We are very pleased, through cooperation across several departments, we are able to rectify the concerns with the 2022 audit. We look forward to the SBOA’s return for 2023.”

Beth Kelley, a deputy state examiner with the State Board of Accounts, said the county was deemed unauditable when it was discovered that the financial statements were not supported by the documents at the county.

After that, county officials were told to get records in order so that the state office could audit the county, Kelley said. The state officials check in periodically, Kelley said, and the audit resumes when the records are put together.

“We appreciate the collaboration between the county and us and getting things completed and being able to move forward,” Kelley said.

The county started using Oracle on July 1, 2022, for its receipt and vendor disbursements, but the payroll processing remained with the old financial software Lawson and then posted to Oracle, according to the audit.

Lake County officials contracted with HTC, an Oracle software consultant, to help with the switch and implementation of Oracle, which included the transfer of the financial data from Lawson to Oracle for the first six months of 2022, according to the audit.

When county officials provided reports from Lawson to HTC, it was done so “without an oversight or review process in place to ensure the accuracy, completeness, and classification of the financial data to Oracle,” according to the audit.

“Various Oracle ledgers and reports provided at the beginning of the audit did not articulate with each other. Detailed receipts and disbursements ledgers did not agree to summary ledgers. County officials were not aware of issues with the reports until we inquired during the audit,” the auditor wrote.

The Employee Benefit Accruals fund, which combined the employee payroll withholdings and the Lake County Self Insurance funds, posted receipts to Lawson and Oracle and posted disbursements to Oracle, according to the audit.

After July 1, 2022, the EBA fund receipts and disbursements were underreported by $2,553,950 and $46,623,710, respectively, and the ending cash and investment balance was overstated by $44,069,760, because of the lack of internal oversight, according to the audit.

The County Auditor and County Treasurer monthly reconcilements were not prepared for July to December 2022 because of the software change, according to the audit. The county hired a consultant, who prepared the reconcilement for December 2022, which found that the financial statement balance was $684,193 greater than the combined reconciled depository balances, according to the audit.

The County Auditor did not comply with the required monthly and annual uploads to the Indiana Gateway for Government Units financial reporting system, according to the audit.

Dan Ciecierski, the Lake County Auditor’s Comptroller of Finance, wrote a letter to the State Board of Accounts stating that the office has been committed to “delivering a clear and accurate account of how public funds are being managed, spent and allocated.”

“The County has begun the execution of a comprehensive corrective action plan with the intent of addressing the perennial underperformance of this repeat finding. We are dedicated to enhancing our operations … and remain resolute in our promise to continually improve,” Ciecierski wrote.

When the county entered into a collective bargaining agreement on Dec. 17, 2020, with the Fraternal Order of Police, Chris Anton Lodge #125 and the Lake County Police Association Local #72 AFL/CIO, Lake County Sheriff Oscar Martinez received $22,958 in clothing allowance, lateral pay and proficiency pay that was allocated for police officers, not elected officials, under the contract, according to the audit.

Martinez’s total pay for 2022 was $188,850, of which $164,972 was his base salary. He also received $920 in longevity, $1,300 in clothing allowance, $19,758 in lateral pay and $1,900 in proficiency pay, according to the audit.

The base salary and longevity were properly paid out, according to the audit, but the clothing allowance, lateral pay and proficiency pay “were allowed per the CBA only to the officers covered by the agreement.”

“The county sheriff was excluded from the agreement and should not have received the benefits of the agreement as his position is an elected official and not an employee,” according to the audit. “There were no other labor contracts, employee handbooks, salary ordinances, resolutions or salary schedules adopted by the County Council to support the compensation paid to the County Sheriff totaling $22,958.”

The County Sheriff did not upload monthly into the Indiana Gateway for Government Units financial reporting system, according to the audit, including the county sheriff’s cash book, commissary fund, and inmate trust fund.

Also, the Drug Task Force and Civil Divisions bank statements, bank reconcilements and outstanding check listings weren’t uploaded to Gateway, according to the audit.

Sheriff’s attorney John Kopack wrote a letter to the State Board of Accounts stating that the compensation Martinez received was in line with past practices by former sheriffs.

Martinez is a lieutenant with the Lake County Police Department, so he’s “well within the discretion of the Lake County Council to compensate a county police officer, who gets elected to the Office of Sheriff,” with the clothing allowance, proficiency pay and lateral pay that other offices receive, Kopack said.

In response to the Gateway monthly uploads, Kopack said the sheriff’s office is creating a Corrective Action Plan to address that State Board of Accounts concern.

The Lake County Board of Commissioners created the Community Corrections Commissary Account on Sept. 17, 2008. But Indiana code states that only the County Sheriff can establish the commissary fund, according to the audit.

Lake County Board of Commissioners Attorney Matthew Fech wrote a letter to the State Board of Accounts stating that the board will work with Lake County Community Corrections to disband the commissary account.

In the Community Corrections Commissary Account, there were 17 reimbursements made from that fund and each reimbursement “lacked sufficient documentation necessary to determine if the reimbursements were made appropriately,” according to the audit.

The 17 reimbursements had attached documents that included a letter from the bookkeeper of community corrections, MapQuest maps, flyers, emails and itineraries, according to the audit.

Two of eight reimbursements paid for the Lake County Community Corrections Fair Share fund lacked detailed receipts or itemized receipts from the vendor for the reimbursement, according to the audit.

Six of seven payments to a home improvement store from the Lake County Community Corrections Fair Share fund did not have detailed receipts to support the invoices paid, according to the audit.

Community Corrections also created a gift card reward program, purchased through the commissary account, without procedures for maintaining records of the purchase, distributions and inventories of the cards, according to the audit.

Kellie Bittorf, executive director of Community Corrections, wrote a letter to the State Board of Accounts stating that the Community Corrections Commissary Account will be maintained in a “comprehensive ledger.”

Community Corrections will make sure that all documentation for a reimbursement request are included before submission, Bittorf said. The department has also implemented “a more comprehensive tracking system” for gift cards, she said.

The Lake County Clerk of the Circuit Court’s trust, which holds bond forfeitures, had $30,116,059 held in the trust as of Dec. 31, 2022. Indiana code requires the court to forfeit the bond of a defendant who fails to appear in court and transfer the bond amount to the state common school fund, according to the audit.

The audit tested 25 trust items and eight items were flagged: Six bonds remained that should have been forfeited but were waiting on an order from the court and two bonds had a satisfaction of judgment filed but remained held in trust, according to the audit.

Lake County Clerk Michael Brown, in a letter to the State Board of Accounts, said the clerk’s office can only release bond forfeitures with a written court order. With a signed court order, the clerk’s office can process the forfeited bond to the state common school fund, Brown said.

The clerk’s office will communicate with all judges to ensure they sign court orders declaring bonds forfeited, Brown said. The office’s financial director will also create a process to research trust items “on a regular basis to ensure they are being processed in a timely manner,” he said.

Kelley said the State Board of Accounts has not yet begun its 2023 audit of Lake County.

akukulka@post-trib.com