Elk Mound special village board meeting to discuss 2016 audit report gets contentious

By Cara L. Dempski

ELK MOUND — It was a train wreck from start to finish.

Village Board President Tom Gilbert scheduled a special board meeting April 11 to discuss and implement changes suggested by Baker Tilly auditor Kim Schult in regards to oversight of payroll for village employees.

What started as a polite discussion regarding what the board heard from Schult during its April 5 regular meeting, rapidly descended to nearly an hour of disagreement and barbed comments from both sides of the issue while four village residents sat listening.

“I’m looking for a think-tank, mostly,” Gilbert said to open the meeting. “I mostly want to make some decisions on paper based on what she recommended.”

Among items Gilbert brought up were notes Schult made in the audit report regarding ledger reconciliations and customer accounts, and the accountability and oversight necessary for the village’s payroll.

“I have a copy of last year’s report to the board, and it was all the same stuff,” Gilbert noted about Schult’s suggestions.

Greg Kipp asked Gilbert for clarification on what he envisions for oversight, as Gilbert suggested committees be given more oversight over the financial operations for the village, or even having clerk Pat Hahn and assistant Julie Conlin look over each other’s payroll reports for accuracy. 

Kipp made the point that Hahn and Conlin are probably the best two to determine how best to follow through on the audit report’s suggestions, as they are the ones working in the office. Furthermore, the trustee said Hahn is in the habit of providing monthly budget reports, which details what funds have been spent and where they were allocated.

Gilbert countered Kipp by informing the board that money used to pay village employees comes from the taxpayers, who elect the board and count on members to use the funds responsibly.

One of the questions Gilbert asked was whether payroll reports could be presented in greater detail as part of the budget summary to make it easier for everyone to see exactly where and how the village’s money was being spent on a monthly basis.

He again asked the board what ideas it had regarding implementing changes based on the suggestions made in the audit.

“The impression I got was, that in her understanding and her opinion, we are doing pretty darn good,” trustee Rebecca Livingston said. “I mean, they have to have something to point out, and we’re a small municipality.”

Steven Abraham spoke up, saying that with Elk Mound’s small size, Schult has seen similar activity and does not see Elk Mound as unusual.

Hahn said what she came up with was a binder as a board check list for open viewing by everyone at meetings to provide transparency. Stamm asked if payroll was in the binder, and Hahn clarified that it is not since payroll does not have check numbers because of direct deposit.

Things started to get heated when Gilbert continued to push for changes in how payroll is completed and processed, citing concerns over Hahn working 181 hours overtime in 2016.

“It’s all available for us to improve on. She was very clear on our lack of adequate segregation of duties, who handles the money, who handles the accounts, that sort of thing. We can all say ‘it’s a small town, we trust everybody,’ but then again, Bremer Bank is closed for a reason,” Gilbert explained, citing a 2013 court case where Bremer Bank clerk was convicted of stealing $48,000 from accounts.

The incident led to Bremer Bank closing its Elk Mound branch.

Gilbert again stated that Schult indicated the person who writes his or her time sheet should not be the person who signs the payroll check. 

One of the audit team’s suggestions was review and approval of time sheets be documented. Hahn said department heads review and sign time sheets, but that means no one signs hers, public works director Mark Levra’s or Police Chief Travis Hakes’. 

She further indicated payroll is Thursday, and Hahn needs to have cards by Monday to have everything taken care of by noon Wednesdays.

“It’s a short window there, and its probably going to be after the fact, but there are reports that can be printed out,” Hahn said.

Gilbert said he realized the time frame would mean most time sheets would not be approved until after Hahn submitted them for direct deposit, but he still felt the board needed oversight of the time sheets.

“Somebody should sign off on that, and check that,” He stated.

Stamm agreed, saying the three department heads could be checked by the village president or employee relations. Gilbert voiced support for this, saying things like payroll and overtime should not go unchecked.

Gilbert then said there are some time sheets that are more detailed than others, and questioned the differences, citing Hahn’s time sheet. She countered that she does the same things as everyone else, writing down when she comes in, takes breaks, and leaves. 

“I put my time down and break it down for work as clerk, treasurer or elections,” Hahn said.

Gilbert asked if anyone looks at it, and she responded that no one looks at it more than they look at Levra’s or Hakes’ sheets.

Stamm stated the payroll is available for anyone who wants to look at it, and Gilbert responded that there were still members of the board who were surprised by the amount of overtime accrued by Hahn in 2016. 

Several board members engaged in a discussion regarding Hahn being paid for overtime, which everyone agreed was necessary as she had done the work. Gilbert continually tried to steer the discussion back to the amount of overtime the village clerk and treasurer worked instead of whether she should be paid for it, but was not successful. 

After nearly 30 minutes of trying to bring the conversation back to Hahn using 28 more hours overtime than she was allotted, Gilbert attempted to take the meeting to closed session.

However, with the board’s new closed session policy, the employee in question must be notified of the session, and has the right to demand the conversation be held in open session. As Hahn had not been previously been told she was the subject of the closed session, the board could not close the conversation to the public.