Non-profit director says state audit found nothing wrong, but state disagrees
By Ed Runyan
WARREN
State audits from 2012 of Sunshine Inc. and Warren Reinvestment And Planning contained numerous findings but “nothing actually wrong,” said Tony Iannucci, director of both nonprofit organizations.
The state auditor’s office disagrees with that assessment.
Sunshine and WRAP are both run by former Warren Auditor Iannucci and are non-profit corporations that use federal grants awarded to Warren. Sunshine focuses on providing housing to low-income people. WRAP’s focus is on economic development.
Warren Councilman Al Novak announced at a July 23, 2013, city council meeting that he had asked the Ohio Auditor’s Office to audit the two organizations after learning that the Trumbull County Treasurer’s Office was threatening to foreclose on 87 Sunshine Inc. properties that had gotten $187,311 behind on property taxes.
Novak said the foreclosure problem reduced the credibility of the two organizations to zero. Novak did not return a phone call regarding the results of the audit, which were released last week. Councilman John Brown said Thursday he doesn’t remember if he asked for either of the audits, but he had not read them and had no comment.
Trumbull County Commissioner Frank Fuda said the Ohio Auditor’s Office invited the commissioners to a recent meeting on the results, but he did not attend and hasn’t learned of the results.
The Sunshine audit said Sunshine failed to provide complete invoices for three disbursements totaling about $2,000 and did not have a rental agreement specifying the allocation of office expenses, for example.
Iannucci said there were a few missing invoices, and there was no written agreement specifying the division of office costs between Sunshine Inc. and WRAP because they’re sister organizations.
But these are examples of “accounting issues that are nonmaterial,” Iannucci said. Neither audit contained a finding for recovery, which means money was missing and needed to be reimbursed, he said.
However, the Ohio Auditor’s Office said in a statement Tuesday: “The auditor’s staff determined there are serious weaknesses in their internal financial controls. The records are sloppy, and there are numerous financial management system weaknesses as are documented in the schedule of findings.”
The statement, from Benjamin Marrison, director of communication for Auditor David Yost, said the audits “began three years ago and took so long because of insufficient supporting documentation and missing records. The auditors’ examination established that there are both financial control and documentation issues that need to be addressed.”
The audit for Sunshine Inc. cost $23,247, and the WRAP audit cost $12,074. Those costs are being covered by the Ohio Auditor’s office, Marrison said.
Sunshine Inc. and WRAP are private corporations not required to adhere to public-records laws for government entities. The 2012 audits are public, but they are the only public audits on record because Sunshine and WRAP are not required to have public audits, Iannucci said.
The Sunshine Inc. board of directors met recently and issued a statement that said the Sunshine audit showed that “all federal, state and local funding [was] expended properly.”
Sunshine board president James Pirko, a real-estate professional, said he is proud of the progress Sunshine has made in the two years since he joined the board.
“These are procedural issues,” Pirko said of findings in the audit. “It pointed out some deficiencies in the documentation in 2012.”
The foreclosure issues Sunshine faced in 2013 largely have been corrected, Iannucci said. The 87 properties that were in delinquency totaling $187,311 have been reduced to about 20 properties and a delinquency of $56,000, Ianucci said. Sunshine is on a payment plan that will eliminate the $56,000 in three years.
Huntington Bank helped Sunshine reduce the deliquency by canceling Sunshine’s debt on 28 vacant, vandalized properties, Iannucci said.
Similar nonmaterial flaws were found in the WRAP audit, Iannucci said. For example, 27 accounts on financial statements did not agree with balances in WRAP’s general ledger, the audit said.
Iannucci said this is an example of the internal auditor for WRAP not having made adjustments to the accounts yet. If the state auditor’s office would have conducted its audit a couple months later, the amounts would have been correct, Iannucci said.