Caldwell Continues Search for Misplaced $120K

Caldwell is considering conducting a forensic audit since it remains unknown where the borough's former auditor allocated $120,000 on New Year's Eve two years ago.

According to Council President Ann Dassing, John Ezyske, who died last month, made the transfer on Dec. 31, 2008 to a location that still has not been identified.

Heidi Wohlleb, the borough's new auditor from Nisivoccia & Co. LLP, told the governing body last week that no further information was provided when she met in June with Ezyske and members of his firm, McEnerney Brady & Co. LLC.

"I don't know if they have any more answers that they could provide," Wohlleb said at last week's council meeting. "I gave them the benefit of the doubt by going and meeting with them, but I wasn't able to get any additional information."

Since Caldwell switched this year to Nisivoccia & Co., Municipal Attorney Greg Mascera pointed out during a May council meeting that he had difficulty obtaining the borough's financial documents from McEnerney & Brady.

However, Mascera said last week Francis McEnerney, the firm's managing partner, has cooperated over the past several months.

"I spoke with Mr. McEnerney on three or four occasions and he assured me that they will provide whatever information they could. That was done," Mascera said. "I guess the question now becomes [the money] can't be identified, but is there a reason to think it was miss-appropriated?"

While Wohlleb was unable to get a "decisive answer" when she met with Ezyske and members of his firm, including Richard Charles, a senior manager who also worked on Caldwell's finances, she concluded that the money was likely miss-appropriated and not missing.

"I didn't get any indication that there was anything that was missing or that there was any kind of wrongdoing," Wohlleb said. "I just think it's the way it was accounted for. We couldn't see anything that was inappropriate."

However, Wohlleb questioned the manner in which Ezyske documented certain items.

"I saw some differences, but I couldn't definitively say it was in this line item or that line item," Wohlleb said. "The fact that the schedule was done in a summary format rather than a detailed format is an indication that maybe something—maybe they had to make an adjustment and that's how they make an adjustment. I really don't want to say what they did, because I really don't know."

According to Wohlleb, when she posed these questions to the firm, she "just didn't get any answers."

Dassing referred to the situation with McEnerney & Brady as "totally unacceptable."

"Part of the worry on my part is this is a date—12/31/08 and 12/31/07—are two dates where we had two sets of bill lists each year that were not authorized by council," Dassing said.

"So when I hear there's a $120,000 discrepancy, maybe it's not a discrepancy, but if you can't find it and you can't find where it's allocated, there's a difference between what it looked like at 12/31/08 and what it ended up being on 1/2/09. I'm worried about that."

Margaret Cherone, the borough's new chief financial officer, recommended a forensic audit. In addition, Wohlleb suggested conducting a re-audit of 2008 and re-creation of all financial documents.

"You would have to re-look at how all the receipts and disbursements were charged to the budget," Wohlleb said. "We're not looking for lost money, but where it was placed."

Councilman Joseph Norton said the finance and budget committee will begin the process by examining all of the information and will consider if a forensic audit is necessary.

"We're not talking about a couple of dollars here. We owe it to the taxpayer to look into it to make sure all the money is accounted for," Norton said.

"It's a $120,000 and if it has to be at the hands of a forensic audit, so be it. But we wouldn't be doing our diligence up here if we didn't do that. I just think we need to get an answer as to where it is."

With the borough's new personnel that includes Cherone, Wohlleb and Borough Administrator Paul Carelli, Norton said he believes the borough has the resources to not let a similar incident happen again.

"I can say that I'm confident with the new personnel that we have put in place this year that they will be able to correct a lot of the recurring issues that have plagued this borough over the last several years," Norton said.

"Going back from audits from 2005 and on and the unfortunate situation that has occurred over the last several years with the personnel here, this will be corrected. It's not going to be overnight, but we're going to get a jump on it."

Mayor Susan Gartland wasn't so sure.

"Some of the things that have been reoccurring—the fixed assets—are we going to be doing that? These are things that have been reoccurring and have not been started," she said.

"These are things that have obviously been recommended before. We have not had the personnel to do it so far, so I don't know if we have adequate personnel to do some of these things now."