Audits reveal misappropriation in WascottWASCOTT – When Janice Newsome started to ask questions of local government in April 2008, her inquiries were met with hostility.
By: Shelley Nelson, Superior Telegram
WASCOTT – When Janice Newsome started to ask questions of local government in April 2008, her inquiries were met with hostility.
This week, numerous residents may have learned why some town officials grew guarded. The long-anticipated results of the 2007 and 2008 audits, the first performed since 1999, identified $72,426 in misappropriated funds. Under Wisconsin law, the audits are required annually because the clerk and treasurer roles are combined.
“To me that seems like an awful lot of money that was embezzled from taxpayers in the town of Wascott,” Newsome said. The expenses for “non-town” disbursements ended in May 2008, when Newsome – then just a town resident – started seeking public records to get answers to her questions about the town’s finances.
Newsome, who was elected board chairwoman last year, said some accused her of making political hay for a couple-hundred-dollar mistake, but the audit reveals the town’s losses were more than simple errors; money started disappearing in November 2001.
The previous town board approved the audit and hired the firm in January 2009 eight months after residents like Newsome and Steve Trainor started demanding the financial review.
“I’ve been waiting for this day for a long time because we’ve had some things going on for the last couple years that shouldn’t have,” Trainor said. “For 10 months, this new town board has been bashed and hollered at as they try to make the necessary changes to get the town back on track. And I don’t think that’s right.”
During the height of the public outcry, Trainor would drive to the town hall daily to check for special meeting agendas posted with only 24 hours notice. While the posting met requirements of state open meeting laws, no one would know about the meetings without the close monitoring, he said.
Douglas County District Attorney Dan Blank said the interesting thing about the story is it was citizens who started to get a “bad vibe” who started researching and asking questions to bring these issues to light. He is currently reviewing the state’s investigation for possible criminal charges.
Anderson, Hager, Moe, certified public accountants of Hayward, conducted the audits for 2007 and 2008, but found the misappropriation of funds began in 2001.
Newsome said it ended up being a costly venture because the routine audit uncovered discrepancies – such as having no record of cash receipts for 2007 or 2008 – that prompted a deeper look into the town’s finances.
“They had to spend many, many hours doing a forensic audit of records to come up with the final amount that was embezzled,” Newsome said.
“My experience is in these kinds of situations is they’ve just identified a fraction of what was lost and a substantial number of the towns records are missing,” said Supervisor Bob Beglinger, who was elected last year when nearly 72 percent of the town’s eligible voters turned out and ousted its entire town board.
“It was discovered during the audit process that certain credit card disbursements were paid that appear to be reimbursing the former clerk/treasurer for non-town expenditures,” according to the 2008 audit report released Wednesday on the town’s Web site. “The amounts discovered for 2008 … were $7,887. In prior years there was an additional amount of $64,539 that was identified as unauthorized disbursements.”
Last year, after the Wisconsin Department of Justice launched an investigation into the matter, the town’s then-clerk/treasurer, Val Bremanis, resigned her post.
“I am so sorry for what I did and especially that I hurt those who believed and trusted me,” Bremanis wrote in her resignation letter to the board nearly a year ago. “All I can say is that I had a very bad lapse in judgment.” She made no statement about what she did, except to explain that her husband, who she said wasn’t involved, was taking on extra responsibilities as the town’s assessor. Andy Bremanis, the town’s former assessor, resigned last year too.
To date, charges have not been filed that would implicate Val Bremanis in the misappropriation of town funds.
Blank said he expects to make a charging decision or decisions relatively quickly once he has all the elements of the case gathered and discusses the matter with the state’s justice department. He anticipated having final reports by month’s end.
“There’s potentially more than one suspect in different aspects of the investigation,” Blank said.
The audit reports show the town was operating under a flawed system, Newsome said.
The town has already implemented a number of the recommendations made by the auditors, said Supervisor Doug Bush. After the new board members took office in April, the three-member board implemented a new financial policy that meets most of the recommendations presented by the auditing firm. Other recommendations will be adopted soon.
Among the changes are ensuring the board reviews all financial documents and monthly account reconciliations are done by Clerk/Treasurer Jeanette Atkinson and Newsome, each using a different method, to ensure the books balance and records are accurate.
What the board is trying to do is implement these policies and procedures recommended by the CPAs to ensure the taxpayers don’t go through this again, Bush said.
“We are under the microscope now to perform these policies and procedures … It protects all of us as taxpayers,” Bush said.
“The focus for us right now is trying to restore that $72,000-plus that was misappropriated … to make the town whole,” Beglinger said.
Trainor commended the board for the steps it has taken to protect taxpayers like him.
“Did it cost money to do this? Yes,” Trainor said, answering his own question. “But it was necessary and it was the legal thing to do. From the report, it looks like we can’t afford not to have these checks and balances in place … things weren’t right in the past.”