Comptroller advises town board after $250K embezzlement
Jan. 14—The state Comptroller's Office issued several oversight recommendations to the town of Pharsalia board after a former supervisor pleaded guilty to stealing almost $250,000 from the town.
Former Pharsalia Town Supervisor Dennis Brown pleaded guilty in June 2021 and was sentenced to one to three years in state prison in September. He also has to pay back the town the $240,000 he stole. The Daily Star previously reported he had returned $125,000 by his sentencing date.
Auditors from the comptroller's office reviewed town accounts from Jan. 1, 2016 through Sept. 30, 2017. Auditors also "extended our scope period back to 1987 to review the stipend agreement between the former Supervisor and the Town; 2006 to review Board minutes for the Board's approval of positions held by the former Supervisor; and 2015 to conduct a three-year analysis of budget estimates," the report said.
Auditors reviewed the records to see if the town board provided enough oversight of the supervisor's expenses. The report said board members did not provide enough oversight, which allowed the supervisor to misappropriate town funds. According to the audit, Brown "disbursed more than $172,000 without Board authorization" and "inappropriately paid himself more than $57,000."
Auditors found that while the supervisor provided monthly financial reports, board members "were unaware that these expenditures were being made because they do not thoroughly review the financial activity, bank statements or canceled check images." The report also said an audit was done in 2016, but the board failed to look at it closely.
Brown was also appointed to the following positions: Health Officer, County Landfill Monitor, Town Landfill Administrator, Assistant Dog Warden (2017) and Town Historian (2017). The report said the supervisor gave himself a stipend for each position, which the board did not know. The report said supervisors are prohibited from being appointed to positions they oversee, and public health law prohibits a member of the governing board to be made health officer of a town, and it wasn't required as the county has a formed health district.
The report also said the board was unaware that Brown failed to file the annual audits to the comptroller's office from 2015-17.
Auditors issued several recommendations for the board, including setting town positions salaries annually; review financial records, reports and supporting bank statements; perform a thorough audit; adopt budgets that contained all planned revenue and expenditure estimates and monitor financial activity through the year; ensure the supervisor prepares and files the AUD with OSC annually.
It also gave the supervisor the following recommendations: disburse town money only after getting board approval and prepare the annual AUD.
Supervisor Jeremiah Micklas issued a short letter of response saying the town agrees with the findings and will submit a corrective action plan. He also said, "We appreciate your guidance in this matter and look forward to realigning our town with the proper procedures to reduce the risk of this happening to our town in the future."
