Archive for Wednesday, January 20, 1999


January 20, 1999


Numerous questions had arisen resulting from the arrest and conviction of former City Clerk Penni Porter for misuse of city funds.

Ill feelings were spilled and a chronology of past audits outlining discrepancies in the accounting processes at city hall were shown during a Thursday meeting between city officials and its auditing firm.

Thomas Singleton, vice president of the Lawrence accounting firm Schehrer, Bennett & Lowenthal, was on hand along with Julie Craig, the firm's field auditor handling the Baldwin City account. Mayor Stan Krysztof, council members Marilyn Pearse and Lee Whaley, City Administrator Larry Paine and new City Clerk Peggy Nichols represented the city.

The meeting had been called to discuss past audits as the city considered whether to retain the firm. Numerous questions had arisen resulting from the arrest and conviction of former City Clerk Penni Porter for misuse of city funds, which was discovered last summer. While no firm amount of money allegedly taken has been established, Porter has been ordered to pay around $20,000 in restitution as part of her sentence.

Council members wanted the meeting to express their concerns about what happened and, ultimately, what was said as the Porter case unfolded. Singleton was aware of those concerns and outlined what steps the firm had taken to try to alert the city that there were problems.

"There's a lot of pain in this room," said Singleton. "If nothing else, it's made everyone alert."

He showed letters that had been sent to city officials as far back as 1996 outlining the firm's suggestions for tightening accounting procedures. One of the letters, dated June 4, 1997, detailed discrepancies in the handling of municipal court money -- specifically $8,000.

That's also where communication between former City Administrator Brian Wilcox, Porter and the council came into the mix.

"I remember that (letter) real well," said Whaley.

"We got a song and dance from Penni and Brian about those concerns (raised in the letter) at the same time," said Krysztof.

Singleton indicated that because of concerns about libel and slander, his firm was trying to point out problems without accusing anyone.

"Everyone was trying to maintain a great deal of constraint at the time. But the discrepancies were pointed out by the firm," he said.

"Brian gave us a four-page-long letter showing how she (Porter) was making the corrections," said Pearse.

"We all know they weren't," responded Singleton. "These are all the lessons that we learned."

Another lesson learned concerned the "clerk's revolving account," from which Porter was able to write checks and make deposits without detection.

"We didn't know about the clerk's revolving account until we got a returned check on it in May," said Pearse. "That's pathetic. We didn't know about it."

Throughout the two-hour session, Singleton and Craig made additional suggestions about how problems could be avoided in the future. Paine and Nichols have already instituted numerous checks and balances in the accounting process as well.

The last issue was raised by Pearse, who was concerned about comments made during the investigation to Douglas County Sheriff's officers by Richard Bennett, a member of the firm who was in charge of the Baldwin City account before Singleton took over this year. Pearse said Bennett implied the council knew about the discrepancies and chose not to do anything about them.

"That, in a nutshell, was what I was upset about," said Pearse.

Singleton apologized for the comments, but reiterated that after reviewing the firm's work on the account that he stood firmly behind its performance.

When the meeting began to wind down, it was noted that the concerns had been taken care of and that the firm would be retained, although that wasn't scheduled to be formally done until Tuesday's council meeting.

"We've got to talk to each other. We need to have these kinds of sessions," said Singleton.

It was decided that, in the future, city council members will be included in meetings with the auditing firm instead of communicating through the administrator and clerk.

"My comfort level has changed completely from when we started (this meeting)," said Krysztof as the meeting came to a close. "We do appreciate you coming and straightening things out."

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