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December 4, 2005Other townships pondering changesMany also use accountants East Bay hadTRAVERSE CITY - Blair Township Supervisor Patrick Pahl said he'll consider changing auditors after fresh eyes uncovered a host of financial problems in another local township.Pahl's among a handful of area township officials who said they'll more closely scrutinize their auditing practices after financial troubles cropped up in East Bay Township. East Bay this year switched auditors after more than a decade with local firm Dennis Gartland & Niergarth. New auditors cited major problems with the township's internal controls and uncovered an alleged embezzlement scheme that spanned a decade. Dennis Gartland & Niergarth - the firm wouldn't comment for this story - also audits books in Peninsula Township and the Village of Northport. Peninsula officials will seek bids on a new auditor. "In light of what happened in East Bay Township, I think all the townships should be looking in that direction," said Peninsula trustee Jill Byron. No so in Northport, which has used Dennis Gartland & Niergarth since the 1980s. "We have a lot more checks and balances in place than (East Bay)," said clerk Laura Weiss. Many states require a switch every five years, said Brian Green, of the University of Michigan Dearborn School of Management. Long-term relationships lead to friendship and a comfort level that can compromise an auditor's independence, he said. Acme Clerk Dorothy Dunville reported no problems with the township's previous auditor, but officials switched nonetheless. "I think it's only conscionable you change it after four or five years," Dunville said. "That's just good business." Elmwood Township treasurer Debbie Street, however, said her board has used auditors Tobin & Co. for years and aren't inclined to switch. "Tobin was very familiar with everything we do so we consider him a better deal and I think it would be very expensive to bring in someone new," she said. Garfield Township clerk Kay Schumacher said her board talked about switching auditors but members aren't sure if they can justify extra costs needed for a switch. "It's about how much faith you have in what you've been doing," she said. Other officials said East Bay's woes won't happen to them. "You're not going to find any discrepancies in Green Lake Township like you found in East Bay," said clerk Rita Dinger. "I know it's going to trickle down and everyone thinks all townships are a bunch of crooks, but we're not." But Green said officials in small townships and villages often don't have a clear separation of duties necessary to establish good internal controls. "When you get that small, you are really relying on the honesty of people," Green said. "Look at it this way: Think of 50 people you know and how many of them would take something or do something illegal if they knew they would never be caught?" he said. Politics and personalities frequently mar effective financial oversight, several local township officials said. "The checks and balances are set up so the clerk and the treasurer keep an eye on each other and in 80 percent of the cases I know the clerk and treasurer don't get along," said Peninsula Supervisor Rob Manigold. One local clerk said its not unusual for some townships to go months without reconciling their books because the clerk and treasurer aren't on speaking terms. "You need to reconcile, and if you don't do that you are asking for trouble," said Dean Bott, an accountant, former township treasurer, and Grand Traverse County's finance director. "One of the problems at the township level is in some situations, maybe most, you don't have people with basic financial record-keeping ability," Bott said. "They are voted in by a popular vote, but they don't necessarily have the needed skills and experience to do the job." See Related Stories: Accountants missed many red flags, officials say - December 4, 2005 Bartko hears felony counts - November 29, 2005 Two more face charges in financial scandal - November 23, 2005 News Break: Ex-supervisor, current treasurer charged - November 22, 2005 Records show township paid planner from U.P. - November 13, 2005 Signature goal reached for recalls - November 9, 2005 East Bay Township probe widens - October 27, 2005 Bid for state's assistance in removing Gee falls short - October 12, 2005 East Bay recall petition drive thriving - October 11, 2005 Gee trial delayed as prosecution continues to build case - October 1, 2005 Audit: East Bay Township clerk took $62K - September 28, 2005 Residents demand answers from East Bay board - September 16, 2005 Audit may result in more charges - September 14, 2005 East Bay residents to circulate petitions - September 3, 2005 East Bay finances: 'Little stuff' totals thousands - August 28, 2005 Prosecutor says East Bay probe may widen - August 26, 2005 Former supervisor likely purchased personal items - August 21, 2005 East Bay Township clerk is back to work - August 21, 2005 More money may be missing in East Bay - August 16, 2005 Lile suggests shutting down East Bay government - July 22, 2005 East Bay Township supervisor expects 'real ugly' meeting - July 22, 2005 East Bay assessor to be paid as fate is determined - July 12, 2005 Errors pile up in review of East Bay records - July 10, 2005 Public backs East Bay probe leading to arrest of clerk - June 28, 2005 East Bay Township clerk charged with embezzlement - June 23, 2005 Township officials pushed for audit leading to Gee's arrest - June 23, 2005
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