State demands corrective action following Hayes Township audit
HAYES TOWNSHIP — Despite not being on the agenda at their Jan. 8 meeting, the Hayes Township Board of Trustees were forced to publicly confront the results of recent audit reports as several citizens raised concerns about the township’s financial standing.
Unreconciled bank statements, lack of accounting information and a lack of internal controls were some of the red flags noted in the 2022 and 2023 financial reports for Hayes Township, conducted by Gabridge and Company.
The results compelled the Michigan Department of Treasury to require a corrective action plan be submitted within 30 days, according to letters written to township officials on Dec. 27, 2023 and Jan. 3, 2024.
"Bank accounts are not being reconciled and independently reviewed in a timely fashion," read one audit document, further stating "this condition is due to the township's negligence in fulfilling its responsibilities."
Several other noted violations include:
Actual expenditures exceeding budgeted amounts
Misstated township records
Cash not being reconciled properly
State revenue and tax statements were incorrectly posted
Journal entries were incorrectly posted providing incorrect expenditure totals
Credit card purchases and gift card purchases were not properly reviewed and reconciled
Payroll tax liabilities were not paid correctly
Documents also warn that the township’s failure to monitor these items could lead to a misappropriation of funds, citing the board's failure "to approve all disbursements prior to payment as required by charter or statute."
“The township board of trustees is not aware of the true financial status of any of the township's funds and therefore could not make any sound financial decisions,” said citizen John Donahue, reading from reports during the public comment section of the meeting.
“The auditor for the state stated that, is that correct?” Donahue asked the Hayes Township Board members.
Township supervisor Ron Van Zee replied, “My understanding, yes, through the process of the audit, yes.”
Van Zee also noted that no funds had been misappropriated and that the township had made steps to correct their weaknesses and change policies accordingly.
“I’m very concerned about this as a citizen of the United States and citizen of Michigan and a citizen of this township,” said Donahue, who also requested the board address the budget in more detail during their monthly meetings.
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According to township treasurer Julie Collard and clerk Kristin Baranski, as well as the other trustees at the meeting on Jan. 8, an official corrective action plan has been sent to the state. One of the most significant items of change was the replacement of the accounting software Quickbooks with a program called BS & A. Van Zee estimated the cost at $35,000, with an annual service fee of $7,000.
A citizen letter submitted to the board signed by 22 Hayes Township residents also detailed concerns about the board’s lack of transparency regarding the audit and the measures being taken to correct problems.
“The township board must add the 2022 and 2023 audits and corrective action plans on the Jan. 8 agenda, disclose all audit documents and letters to the public at the meetings and on the website, and if necessary, set special meetings for further discussion and decision-making,” read the letter, dated Jan. 8. “Actions and decisions to fulfill the treasury’s directives must be made in front of the public and decided as a board, in accordance with the Open Meetings Act. The Corrective Action Plans and the unauthorized disbursements must be made public and voted on."
The Hayes Township Board meets on the second Tuesday of each month at 10 a.m. and on the fourth Tuesday of each month at 7 p.m.
— Contact reporter Annie Doyle at (231) 675-0099 or adoyle@charlevoixcourier
This article originally appeared on The Petoskey News-Review: State demands corrective action following Hayes Township audit
