- An audit of the Ft. Thomas 2023-2024 fiscal year revealed financial mistakes, namely more than $322,000 being unaccounted for.
- City officials respond in a recent finance committee meeting, stating that this clearly is not fraud. Ft. Thomas residents reacted, asking why these mistakes were made.
- The city’s finance committee approved a forensic audit of the last few years.
The city of Fort Thomas will likely be doing a forensic audit after recently discovering the city needed to write off more than $322,000.
The discrepancy that led to the write off was due to sloppy accounting, not fraud, according to officials. “I’m looking at this and going, there’s no fraud here,” Interim Finance Director Linda Chapman said during a Nov. 5 finance committee meeting that lasted more than two hours.
Multiple residents spoke on the situation during the public comment portion of the meeting.
“Why are we allowing these types of issues and discrepancies? This falls, in my opinion, to the executive leadership of the city,” Nicole Utz said in the public comment portion of the meeting. She said the citizens “cannot trust what’s happening.”
At the end of the meeting, the committee voted to have a forensic audit conducted. The decision will have to be approved by city council, though all its members also serve on the finance committee.
Why were the city’s records missing $322,000?
John Chamberlin with Chamberlin Owen Public Accountants conducted the city’s recent audit.
When attempting to balance the city’s 13 bank accounts with internal records, Chamberlin found that $361,000 was missing from one account. He said Chapman made “significant adjustments” within the city’s general fund to bring that missing amount down to $322,000, which was “as close as she could get it.”
Chapman said the “unaccounted for” funds are from school transfers, and gun and uniform expenses that were never documented. “It’s not like it’s missing money.”
In the Sept. 30 finance committee meeting, Chapman said differences in internal records and bank accounts had been accumulating since 2016 and “kept snowballing.”
Chapman said she doesn’t know why there weren’t comments about the differing balances in previous audits, or why adjustments weren’t made to reflect the city’s accurate balances.
Chamberlin said that the city’s Former Finance Director, Joe Ewald, was balancing the city’s accounts on an annual basis instead of monthly. “We saw that as a huge problem.”
Chapman said the city wasn’t using “what we call a formal accounting system,” before it implemented Springbook in 2023.
How has the city addressed the situation?
Chamberlin said at the Sept. 30 meeting that Chapman recommended to City Administrator Matt Kremer that they “write off that $322,000 as an error of the past,” and said Kremer agreed.
$322,000 was taken out of the city’s current-day cash reserves as part of writing it off, according to Chamberlin.
Fort Thomas’ finance director position in a game of musical chairs
As the interim finance director, Chapman took over the position from Ewald, who left in September to work as Covington’s budget manager, according to his LinkedIn.
Before the Nov. 5 finance committee meeting began, council approved Steve Bodde as the finance director and assistant city administrator. Chapman said she will stick around to train Bodde.
Residents had concerns
“I do think that we have a responsibility and an obligation to move forward with a forensic audit.” said City Council member Andy Ellison.
If approved by council, the forensic audit will look at the city’s finances over the last few years. It will cost the city $1,500 to $2,500 for each year covered in the audit, according to Kremer.
The next city council meeting is on Monday, Nov. 17.