For more than three years the executive director of Chariton Valley Planning & Development Council of Governments in Centerville ran her own kingdom.
According to a 56 page audit of CVP&DCoG released July 2 by David Vaudt, Iowa state auditor, Tracy Daugherty-Miller, the executive director of CVP&DCoG, approved her own time sheets, authorized her own raises, rented office space to the council she or her family owned, had free reign with the council's VISA credit card and ran up a line of credit.
CVP&DCoG administrators government programs for Appanoose, Monroe, Wayne and Lucas counties.
The audit covers the period of July 1, 2007-Aug. 31, 2010 and in great detail explains what, where and when Daugherty-Miller was doing and what the Board in charge of Council oversight wasn't doing.
For instance, the audit states the Board responsible for oversight of Council operations did not review Daugherty-Miller's time sheets, did not review rental agreements, did not ensure expenditures were necessary or reasonable and failed to oversee the council's line of credit.
The audit questions what happened to more than $100,000 spent while Daugherty-Miller was in charge. The audit found $101,789.38 of unallowable disbursements of federal funds for programs administered by the Council, with $53,976.06 disbursed for improper council operations that "should not have been paid for with either federal of other Council funds" and $47,813.32 that was seen as reasonable for Council operations but "did not qualify to be paid for with federal funds."
Vaudt's audit states of the improper disbursements, Daugherty-Miller received $46,805, or almost half of the amount identified.
The audit states Daugherty-Miller’s time sheets were preprinted as in at 8 a.m. and out at 4:30 p.m. Monday-Friday, so during the work day departures or arrivals were not recorded. Daugherty-Miller recorded compensatory time on her time sheet, despite the fact she was not eligible to accrue compensatory time as executive director.
"According to Board members we spoke with, they did not authorize any salary increases for Daugherty or other employees of the Council," states the audit. "We reviewed the minutes available for the period of our review and found no indication the raises were approved by the Council’s Board."
Daugherty-Miller was making $65,000 per year on July 1, 2007. She gave herself two raises without Board approval: Oct. 1, 2007 her salary goes to $68,250 and July 1, 2008 her salary goes to $72,345.28.
The audit finds the $17,976.53 of additional salary, the additional FICA of $885.42 and the additional IPERS of $1,028.40 on the unauthorized raises were improper disbursements. In addition, the Council paid $885.42 for the employer’s share of IPERS and $1,028.40 for the employer’s share of FICA on the unauthorized raises.
The audit found because the Board was not reviewing Daugherty-Miller’s time sheets, they were unaware she was reporting earning and using compensatory time. Because Daugherty-Miller should not have earned or used compensatory time, $13,489.71 is included as an improper disbursement.
Daugherty-Miller often called in and said she was not coming in, and according to the Board president, she was to call him anytime she would not be in, states the audit.
"He rarely received a call from Daugherty and he stopped in from time to time and found she was not in the office," states the audit. "According to staff we spoke with, when Daugherty was asked about her absences from the office, she would state she was ill or working from home.
"The Board president and staff could not locate any records, including leave slips or notes indicating when she was gone," states the audit. "Because no records could be located, there is no evidence to support the allegations she was not properly recording her time on her time sheets."
The Council paid Daugherty-Miller for the remaining vacation balance of 116 hours shown on her final pay stub at the hourly rate of $34.79 which was higher than her authorized rate of $31.25 per hour and she received $410.64 more in termination pay than she was authorized to receive, according to the audit.
In addition, the audit found Daugherty-Miller used 47 hours more sick leave then she was entitled to.
Monthly rent payments made to Daugherty-Miller, her husband or her mother-in-law by the council increased between June 2007 and April 2008. The audit questions and finds the council was overcharged for rent during that time.
Daugherty-Miller’s mother-in-law, Linda Miller, owned the building at 205 N. 13th St. from Oct. 19, 2000 to Aug. 20, 2007. Daugherty-Miller and her husband purchased the building in August 2007, just one month after the Council entered into a new lease for space within the building.
"On July 3, 2007, the Council signed a new one year lease for the second floor and the rent increased from $300 to $450 per month, a 50 percent increase. However, the amount of space specified in the lease did not increase," states the audit. "Although the lease was with Linda Miller, the payments were made to Mike Miller, Daugherty’s husband, after the sale of the property. The first check issued to Mike Miller was for the September 2007 rent."
The Council continued to pay monthly rent of $450 for the entire building until a new lease was signed on April 1, 2008. The new lease, effective April 1, 2008 through March 30, 2010 was for the entire building.
The lease was for $10,800 per year, or $900 per month. The rental payments were made to Daugherty-Miller through late September 2009. From early November 2009 through March 2011, the payments were made to Daugherty-Miller.
On April 29, 2010 the Council signed a one year lease with Daugherty-Miller for the period May 1, 2010 through April 20, 2011 at a total cost of $8,400 ($700 per month).
“According to staff we spoke with, the rent was decreased as a result of financial problems encountered by the Council," the audit states.
The Board moved into its current location at 308 N. 12th St. in April 2011.
The audit found by using $500 per month as a reasonable market rate for rental property in the area, the Council was overcharged for its space at the old location owned by Daugherty-Miller by $11,950. In addition, Daugherty-Miller or her husband were paid $34,420 in rental maintenance.
"The Board relied on Daugherty to locate an appropriate location and negotiate a reasonable rate for the Council," states the audit. "However, because Daugherty and/or her family members owned the building leased by the Council, she was not in a position to represent the Council’s best interests when lease terms were established. Daugherty-Miller would have been responsible for securing the location and the Board should have approved the terms of the lease."
Part of Daugherty-Miller’s job duties included attending meetings and training related to the programs administered by the Council and they often occurred in the Des Moines area and outside of Iowa.
"According to staff we spoke with, Daugherty used her personal vehicle to travel to training events and charged mileage and other expenses directly to the program or programs," states the audit. "Daugherty also purchased office supplies using her personal funds and submitted claims for reimbursement."
The audit found Daugherty-Miller received reimbursements totaling $4,906.03 with $823.20 classified as reasonable but unallowable based upon a description included in the memo line of the check or description included on the reimbursement form.
According to the audit, the Council maintained a VISA credit card used primarily for travel costs and purchases of office supplies. Daugherty-Miller was the primary holder of the credit card and the most frequent user.
"During our review of the credit card statements, we identified statements which included notations indicating some of the charges were personal in nature. Attached to the statements were copies of several redeemed personal checks totaling $614.44," states the audit. "The personal checks were written by Daugherty to the Council to reimburse the personal charges. We identified more personal charges than those which Daugherty reimbursed the Council."
The audit found $5,560.73 of improper disbursements, $17,851.90 of reasonable but unallowable disbursements and Daugherty’s personal checks totaling $614.44 reimbursing the Council for personal purchases and it also identified $1,568.24 of improper expenditures and $24,185.77 of reasonable but unallowable expenditures.
"A function of the Board is to help ensure the Council operates in an efficient and economical manner while meeting the needs of its members or other users of its services," states the audit. "Expenditures should be reviewed to ensure they are necessary and reasonable for operations of the Council and comply with any program requirements. The $1,568.24 and the $24,185.77 are improper disbursements and reasonable but unallowable disbursements, respectively."
According to the audit, when the Council was established, the Board's decision not to charge member dues left the Council with no source of revenue other than fees charged for services and funding received from the federal and state programs it administered. Because many of the programs administered by the Council are on a reimbursement basis and the Council had to pay its bills prior to requesting reimbursement from these programs, the Council needed to establish a line of credit with a local bank.
The audit states the Council’s line of credit reached an outstanding balance of approximately $200,000 twice, on Jan. 25, 2008 and again on June 7, 2010 and as of Aug. 11, 2011, the Council owed $175,460.45. It had gone as low as $29,355.82 on April 2, 2009.
The Council was to use grant proceeds and fees charged for services to repay the line of credit but it had to rely on its line of credit to pay bills related to its programs and general operations. Once the Council received reimbursements from the federal and state programs, the Council used the funds to repay the line of credit.
"The balance on the line of credit continued to grow as a result of the financial decisions made by the former Executive Director, poor oversight by the Board and the need to use the funds received to maintain the current operations of the Council instead of paying off the line of credit," states the audit.
According to the audit, the Council is now charging its members annual dues, its main source of unrestricted revenue and as such has realized savings by decreasing costs for rent and salaries. As a result, the Council has been able to repay a portion of the line of credit.
In addition, the audit found the Board did not have a current budget or ever had a budget for Council operations. Daugherty-Miller failed to provide written financial reports, bill listings or other information related to the financial condition of the Council despite Board members request for such information, she prepared and signed all checks and she had custody of the Board president’s signature stamp and performed all functions related to the cash receipt and disbursement process.
Daugherty-Miller resigned on Aug. 25, 2010.
For more than three years the executive director of Chariton Valley Planning & Development Council of Governments in Centerville ran her own kingdom.
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