AUDIT REVEALS MISSING BANK DEPOSITS FOR ORAN COFFERS

ORAN -- Accountants with the state auditor's office met with Oran residents Thursday to reveal what they called inaccuracies in city records and questionable procedures by the Board of Aldermen.

Voters petitioned for the audit in 1995, gathering the 119 signatures needed to force the state auditor's office into action. Some signers mentioned suspicions about city finances and numerous closed Board of Aldermen meetings.

Karen Laves, director of the audit, and Douglas Porting, audit manager, explained Thursday that $10,123 was missing from bank deposits between April 1, 1993, and June 30, 1994. But from July 1994 through October 1995, deposits exceeded receipts.

The numbers mean one of two things, Laves said. Either someone was slowly paying back the $10,123, leaving a shortfall of only $4,000, or the extra money is another accounting problem that has nothing to do with the shortfall.

The matter will be turned over to Scott County Prosecuting Attorney Cristy Baker-Neel, who will decide if criminal charges should be filed.

Baker-Neel didn't attend Thursday's meeting. She said later Thursday that she wanted to view the information without bias when she received it.

City Collector Jean Neal contends the problem was merely in accounting, the result of deposits made after the fiscal year was ended.

"I got two months behind in the fiscal year because of the new computer, taxes coming out and meter reading being delayed," she said. "I haven't taken any money. I told them that. It was just a matter of getting behind."

Oran's latest comprehensive financial report, dated March 31, 1995, shows city finances to be about $16,000 over the expected amount, Neal said.

But there were other problems auditors discovered in the collector's office. There weren't receipts for all money collected in bills and taxes, and no effort was made to collect delinquent city taxes.

In addition, the city used some meter deposits from residents as operating expenses.

The Oran Board of Aldermen was cited for several violations of state laws. From April 1994 to November 1995, the report said, the city spent $3,625 in gas and repairs at the service station owned by Alderman Ronnie Diebold. Minutes showed Diebold didn't abstain when votes were taken on the expenses.

Aldermen also failed to solicit bids on several high-dollar projects, including city park bathrooms and a dugout worth $13,586, health insurance worth $11,497 and fire-rescue equipment worth $8,586.

They conducted several closed meetings, legally reserved for discussions of litigation, real estate or personnel. Minutes revealed that several of the closed sessions didn't meet the criteria under the Sunshine Law, enacted to ensure public access to government workings.

Laves also said Mayor Louie Hirschowitz signed blank checks for bills with no way of knowing they were used for proper payments.

During that part of the report, Hirschowitz became upset with Laves.

"If we threw these recommendations out the window, there's nothing you could do about it, right?" he said.

Laves said it was the aldermen's choice whether or not they complied with the state auditor's recommendations.

"If you want to comply with state law, this is how to do it," she said. "These aren't my laws."

Recommendations for preventing future problems included requiring the city collector to retain reports generated by the utility computer system and that the collector have people outside the office regularly verify balances in city accounts.

Aldermen were encouraged to examine city transactions closely to identify conflicts of interest and to establish a bidding policy.

Total cost of the audit was quoted at $12,485.27, which the city of Oran will have to pay.

After the meeting, Walter Madigan, who started the petition drive, said he was satisfied with the findings.

"I just wanted to know where the money was," he said. "I think it was just bad record keeping."

Mayor Hirschowitz said he was convinced the audit revealed no true wrongdoing.

"I don't think we're trying to defraud the taxpayers of this town," he said. "Half are kin to each other and the other half are friends."