AUSTINTOWN Audit shows loans and less revenue

Ohio says the township should form an audit committee.
By IAN HILL
VINDICATOR STAFF WRITER
AUSTINTOWN -- A state audit shows township trustees took out two loans totaling $1 million to pay bills last year.
The audit also shows trustees received $1.5 million less in tax revenue than they expected. It says they did not distort their finances for the year, spend more than they had, or commit errors that required them to repay tax money.
The state audits the township each year.
Township clerk Michael Kurish said trustees took out the first loan of $500,000 at the beginning of the year so they could pay bills before the first payment of property tax revenue came in. That loan was later repaid, he said.
The second $500,000 loan at the end of the year was made to pay bills after $460,000 was taken from township tax revenues by the state to pay a tax refund to Phar-Mor. Kurish said that loan is expected to be repaid this year.
Township officials have said that because of increases in the cost of insurance, workers compensation, wages and decreases in revenue, about $1.2 million needs to be cut from the budget to avoid a deficit. Trustees have already laid off several employees.
Revenue shortfalls
A letter written as part of the audit and signed by state Auditor Betty Montgomery notes the township got about $1.5 million less in revenue in 2002 than anticipated. In 2001, the township got $1.3 million less than expected, while in 2000 it was $946,731 less.
Kurish said the 2002 drop was a result of an economic downturn and the closing of the Tamco warehouse on Victoria Road, which was owned by Phar-Mor.
Township officials had estimated that they would receive about $215,000 in revenue from the inventory at the warehouse in 2002, but they only got $97,000 because the warehouse closed last year.
Kurish said that if the financial situation does not change, he expects the revenue estimate for next year to be smaller. He noted trustees may ask voters to pass a levy in August or November.
Montgomery's letter states trustees should amend their estimates for revenue when they learn they will receive less than expected. Kurish said trustees didn't have time after learning they would have to refund tax money to Phar-Mor.
Transfers
The audit also shows trustees transferred $1.8 million between budget accounts last year. Trustees also advanced $6 million from some accounts to other accounts during the year so bills could be paid before revenue was collected, Kurish said.
Montgomery said trustees should form an audit committee to serve as a liaison with the state and follow up on state recommendations. Similar recommendations were made in the audits for 2001 and 2000.
Kurish said he felt an audit committee could provide additional checks and balances in the township as well as ideas to improve the township's financial situation. He stressed that members of the committee would have to be familiar with government finances.
Kurish noted trustees have discussed forming a committee in the past, but "it never got off the ground."
hill@vindy.com