August 23, 2017
Mr. Robert Hinkle, CPA Chief Deputy Auditor Office of the Auditor of State 88 E. Broad St. Columbus, Ohio 43215 Dear Mr. Hinkle, Recently my office has learned of a pattern of suspicious activity related to the financial management and reporting of the Franklin County Community Based Correctional Facility (CBCF). In order to protect government funds and the interests of our community, we cannot ignore these numerous red flags. That is why today, I, as Chief Fiscal Officer of the county, am requesting the Office of the Auditor of State initiate an investigation related to the allegations detailed below. During early August 2017, my office was contacted by the CBCF indicating that the State of Ohio had sent an ACH to the County that was deposited into CBCF’s fund which should have gone to their outside grants account and CBCF asked how this money could be moved. At the same time we also encountered payments being made on purchase orders that were issued in the names of different vendors and for different purposes. These events led to a meeting with CBCF on August 15, 2017. As a result of that meeting and subsequent research we have identified the following issues relating to CBCF: 1. We have observed that CBCF fiscal staff are not opening up purchase orders prior to incurring a liability as required by ORC 5705.41(D); 2. We have observed CBCF fiscal staff are using existing purchase orders made out to a different vendor and for a different purpose to pay expenses which were not properly encumbered with a purchase order; 3. We have verified that when an incorrect purchase order has been used and the expenditure is posted to an incorrect expense category, no correcting journal entries are being requested to properly report expenditures; 4. We have concerns regarding proper financial reporting after learning that an outside account is being utilized for the receipt and expenditure of grant monies; 5. We have concerns regarding the commingling of grant monies in an outside account without apparent adequate accounting for each separate grant; 6. We were told by CBCF fiscal staff that monies were “stolen” from this outside account during a period when the account was not being reconciled; 7. We have concerns regarding the lack of segregation of duties within the fiscal department of CBCF;
373 S. High St., Columbus, Ohio 43215 614-525-7399 www.franklincountyauditor.com