Arthur twp admits to bookkeeping errors, but no stolen funds discovered

February 8, 2019

By Pat Maurer

“Despite what people have said, there was never any money missing from township funds,” said Arthur Township Supervisor Lee Schunk.

Schunk reported that due to bookkeeping errors and a computer error that sent 2012-2018 payroll taxes to the state rather than the Internal Revenue Service, funds were misplaced.

He said the payroll taxes were placed in a separate fund by the state and have since been returned to the township and forwarded to the IRS. “I don’t know why the state didn’t notify us that they had the funds,” Schunk said.

But now the Township may be faced with penalties and fines from the IRS.

The errors were discovered during the last audit.

Since the errors were discovered, Township Clerk Julie Walker has resigned. “She just was unable to comprehend the Quick Books system and was overwhelmed,” Schunk said. “It was more than she could handle.” He stressed that state requirements make the bookkeeping job extremely complicated.

At a special meeting on January 14, Walker made a motion to appoint Andrew (Drew) Verhage as Deputy Clerk, a motion that was approved unanimously.

At that meeting the board discussed bring Hayes Township Treasurer Maye Tessner-Rood to help the clerk and deputy clerk work on the QuickBooks program.
At a January 24th special meeting Tessner-Rood gave the board her findings from the review of the Township books. She suggested a “rebuild” from the date of the last audit on March 31, 2018.

March 31 is the deadline for approval of a new year’s budget.

Rood also said a separate bank account is needed for payroll and that the board look into BSA software for the township books instead of QuickBooks. Schunk said the cost for that program was $23,000, but the Township already owns a portion of the software. “QuickBooks was never meant to be a program for a Township,” Schunk said. “It’s geared toward small businesses and individuals.”

Rood suggested setting up a payment plan to purchase the program and that the board get a post office box. Schunk said he had ordered a new locking mailbox to be placed at the hall and at Monday’s meeting it was reported that the Township now has a post office box.

Verhage and Rood spoke about the unknown amount of IRS penalties, but said due to the government shutdown they were unable to get exact information.

At a special meeting January 25th in a letter to the board, Walker resigned as the Township Clerk effective February 3rd. Verhage was appointed Deputy Clerk effective January 14th and in the next motion he was approved Interim Clare as of February 4th. He has taken over the job as Interim Township Clerk until the board can find a qualified replacement.

At the regular meeting Monday evening, Schunk reported that Walker had only resigned as the Township Clerk. He said he hoped she would continue to manage the cemetery. “She did an excellent job with the cemetery,” he said.

Business at the regular February meeting included financial reports by Treasurer Anna Sharp and Interim Clerk Verhage with the general fund balance at $29,652.69; a CD at Mercantile for the Roads at $22,451.22 and a Mercantile savings account for the roads at $115,426.78.

Bills totaling $11,035.75 have been paid and are up to date.

Schunk said the back payroll of $12,494 through January had also been “caught up.”

Fire protection, now on a month to month contract with the Harrison Fire Department, was also discussed. Sharp reported donations of $300 for the next month’s contract with the balance coming from the general fund, unless more is received.

Schunk said the budget adopted last year did not have funds earmarked for the Fire Protection contract. He said he was hoping Township residents would send in more funds for the contract.

The board is hoping to place a proposal on the ballot in May for fire protection, but the funds would not come in until next year.

Meanwhile he said donation could be mailed to 3031 S. Athey Road, Clare, MI 48617. The contract costs the Township $1,396 per month, or just over $16,000 annually.

Board of Review members were approved. They will be sworn in at a March 5th organizational meeting and the BOR dates will be March 11th from 9 a.m. to 3 p.m. and the 13th from 3 p.m. to 9 p.m.

A Budget Hearing was set for February 18th at 7 p.m. “We will be adopting the same budget we have,” Schunk said, “but we may be developing and adopting a new budget for the coming year.”

Discussion on roadwork filled the rest of Monday’s meeting. Schunk said at a meeting of Township supervisors, the consensus was that the Clare County Road Commission should be responsible for the maintenance of all roads, not just the primary ones. “Townships like ours that don’t have matching funds don’t get any road maintenance done,” Schunk said. He said repairs are badly needed on at least one of the gravel roads to get to the Township Hall safely. He said the Township had paid for the removal of trees on four miles of Athey and four miles of Clarwin Avenues so that the CCRC could upgrade those roads.

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