MARTINSVILLE — The City of Martinsville’s financial systems have come under scrutiny this week following a public plea from the mayor and a heated discussion at this week’s city council meeting.
On January 26, marketing communications company, Englehart Group, issued a release to RTV6 on Martinsville Mayor Shannon Kohl’s behalf. The release challenged the Clerk-Treasurer and City Council to update financial systems in the city, which include payroll and processing of city invoices.
Kohl said she was deeply concerned that the city’s current financial system is a “patchwork of systems that have been used as a band-aid to struggle along.”
“If unaddressed, the consequences of allowing the current system to continue in place will have dire consequences for the City of Martinsville in the form of a lower bond rating and greater expense to our citizens through higher interest rates,” Kohl said. “It is unfortunate that this has become clear just as we are turning a corner with the new downtown redevelopment and the opportunities from I-69.”
Kohl challenged the city-council and clerk-treasurer to identify both short term and long-term solutions.
“We cannot continue to use patchwork and band-aids that have different, unconnected processes for handling city invoices, payroll, and reimbursement which rely, in some cases, on handwritten record-keeping, and an ineffective series of internal controls,” Kohl said. “We need one coordinated, automated system – and the technology exists to make those updates quickly and easily. We owe it to the taxpayers of Martinsville to find that solution.”
At Monday’s council meeting, Kohl said the city had discussed and approved implementing a new time management system called 'K-time' for nearly a year.
“That system was never implemented,” Kohl said at the meeting. “Since that was not implemented, I’m asking you guys to help us find a solution to a better financial updated system. With the recent things that have happened, I just think now is a good time to implement it.”
The Indiana State Board of Accounts is currently doing a forensic audit and investigation in Martinsville into possible misuse of time and overtime.
Also, Indiana State Police is conducting a criminal investigation into a City of Martinsville employee.
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Meanwhile, the city’s police chief is on paid administrative leave pending the outcome of an investigation.
It is not clear if the SBOA and ISP investigations have any correlation with Kohl’s concerns about the city’s financial system.
Kohl told the council a new financial system would've helped with $143,000 of coding errors the city had to correct.
Martinsville Clerk-Treasurer, Becky Tumey, explained at the city council meeting the company contact they’d been working with for K-Time had died in an accident, which pushed things behind.
RTV6 followed up with Tumey after the meeting, and she said the delay was also due to the software company needing to use a special program to build modules for police and fire.
Tumey said she signed a contract Thursday for the new K-time system and installation is planned for June 2019.
Tumey disagreed that the current system is not working.
“Our software and accounting methods are approved by Indiana State Board of Accounts and is not ‘band-aided or patched,’” Tumey said.
Tumey said at least monthly, and anytime upon request, her office releases reports to the mayor and department heads.
“At the request of the Mayor, I work with her chosen financial advisors, Reedy Financial Group,” Tumey said. “Every month I send the City’s financial reports to Reedy Financial Group that they turn into reports for the Mayor.
From my perspective and that of Reedy Financial Group, there are no ‘financial issues.’”
City council members Phil Deckard II and Kris Fuller questioned Mayor Kohl on why she used a private marketing company to send out a news release about the city’s financial systems on city letterhead, rather than using the city’s own communications person Anna Wilson.
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“I went to a little bit more professional one that had some years to make sure I got that right,” Kohl said at the council meeting.
Fuller and Deckard expressed concern that they did not receive the mayor’s news release about the city’s financial system until days after the media received a copy.
“I don’t know if we are a victim of fake news, or what, but today I received - and several council members received - inquiries about a news release,” said Deckard. “It looks like it comes from the City of Martinsville.”
Kohl responded that the release was from her and the mayor’s office.
“Is this Englehart Group a group we’ve now contracted with to do our PR?” asked Fuller.
“No I paid them to do that,” Kohl said.
“Out of what funds?” Fuller asked.
“Out of my funds,” Kohl responded.
”Your personal funds?” Fuller asked.
“My funds,” Kohl said. “Actually, I take that back. I haven’t paid for that yet.”
“If you use the city letterhead, could you please share that with us?” Fuller said to Kohl. “I’m asking, going forward, could you make sure your company who is working for you sends us these press releases so we aren’t blindsided by the public?”
“It was my letterhead, actually,” Kohl said. “It was supposed to be my letterhead.”
Call 6 Investigates followed up with Kohl after the meeting to get clarification.
She declined to say why she chose to use Englehart Group for the news release rather than the city’s communication person, but she did say it was not campaign related.
“It was not a campaign piece,” Kohl said on Friday.
Blair Englehart, president of the Englehart Group, said his company sent out the release to his media distribution list as a favor and did not receive any funds from Kohl or the city.
On January 26, the mayor’s press release about financial systems also appeared on a new Facebook page called “Online Martinsville,” and was boosted by Kyle Babcock, a Warsaw based business owner which runs digital news websites and social media pages across the country.
“I spent five dollars to boost the post,” Babcock told RTV6. “This is how you get followers. This is my business.”
Babcock said Mayor Kohl never contacted his company about boosting the news release on Online Martinsville.
Martinsville city council member Kris Fuller said Friday he has concerns about how the mayor issued a news release without the council’s knowledge.
“If the Mayor really wanted to work with the Council she would communicate with us and not put out disingenuous statements using city letterhead,” said Fuller. “This is the Mayor’s veiled attempt to mask the current problems involving her administration and play hide the ball with the public. She ‘challenged’ the Council and the Clerk Treasurer to upgrade the city financial system, knowing prior to her statement that the upgrades had already been approved and were planned to launch in April.”
Kohl tells RTV6 she is encouraged that the city council is looking at the financial system approved last April, and if that doesn’t work, the council is looking at alternative options.
According to the State Board of Accounts website, it’s been nearly three years since the city’s last audit.
The last time the state audited the City of Martinsville was 2013 and 2014, with the audit publicized in April 2016.
Auditors found a deputy clerk treasurer was overpaid in excess of $2,947.
In a written response to SBOA, then-Clerk Treasurer, Valerie Hugart, said a payroll clerk incorrectly calculated the deputy clerk’s raise, and the deputy clerk would pay back the money in a payroll deduction.
Current Clerk Treasurer Becky Tumey said she was the deputy clerk who was overpaid and that it was human error, not a problem with the payroll system.
Tumey said the payroll system in use today has been in place since 2005 and is typically updated by the company, Keystone, once or twice a year.
No word yet on when the SBOA’s current forensic audit and special investigation will be finished.
The Indiana State Police’s investigation into a City of Martinsville employee is still ongoing.
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