LAWRENCE COUNTY Missing $1M baffles commissioners

Officials say they won't raise taxes to make up the money.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- What happened to $1 million?
That's what Lawrence County officials would like to know.
County auditors informed officials June 3 the money had not been paid back to the county's Mental Health Mental Retardation budget that had been borrowed to cover year-end expenses in 2002.
Commissioners learned Thursday that of the $4 million borrowed from MHMR, only $3 million had been paid back.
"Unless somebody trips over $1 million in the next couple of days, we are in a deep, deep hole," Commissioner Steve Craig said Wednesday night.
County officials are still waiting for independent auditors Maher Duessel of Pittsburgh to complete their 2003 audit of county finances, but county officials have already started pointing fingers at one another over the missing money.
Commissioner Ed Fosnaught sent out a letter asking county Treasurer Gary Felasco, Controller Mary Ann Reiter and MHMR Director John Klenotic to explain in writing how this came about.
Fosnaught, the only commissioner in office during 2002 when the money was transferred, said he doesn't recall approving the transfer, but that doesn't mean he wasn't involved.
Fosnaught is questioning why it wasn't repaid.
"The commissioners are responsible for the spending plan. The treasurer is responsible to maintain the funds, and the controller is responsible to keep an eye on those funds and to make sure all expenditures are proper," Fosnaught said.
"I'm not faulting Gary for borrowing this money. I'm saying he is one of three who should have known it wasn't paid back."
Fosnaught said Felasco, Reiter and Klenotic should have been keeping an eye on the funds.
Klenotic and Felasco could not be reached to comment.
Reiter said her office only can track finances that have receipts. She said she had no receipts for that last $1 million.
What could have happened
Commissioner Dan Vogler said auditors stressed Thursday that they have not completed the 2003 audit and can't explain the whereabouts of the money.
Reiter said she's hoping it was just a bookkeeping error.
But Fosnaught said it is more likely that the money was spent.
"I think it was frittered away," Fosnaught said. "We had $400,000 in the budget for the sale of property that wasn't sold. And at the end of the year, the county was sending money to Hill View Manor for operations. We were staffed for 100 residents and only had 35. There's a good possibility the money from MHMR was used to cover losses at Hill View Manor."
Commissioners closed Hill View, the county nursing home, earlier this year after determining it wasn't profitable because of a dwindling patient population.
All three commissioners say they are unsure how they will make up the missing $1 million. All agree that it won't come from a property tax increase.
"I don't think it would be appropriate for us to put this on the backs of the taxpayers when they had nothing to do with it," Vogler said.