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Despite battles, recalls, lawyers Goodrich operating efficiently CPA Karl Haiser: There is no basis for any allegations of deficit spending or loss of fund balance.

by Susan Bromley

July 13, 2011

Goodrich- Not only did the village not have a loss of fund balance for the fiscal years ending in June 2009 and June 2010, they actually increased the fund balance between the two years by more than $100,000.

More than 70 percent of this increase will be cancelled, however, by the expected loss of $73,117 in the 2011 fund balance due to legal fees, the cost of a special study, and a decrease in state revenues.

These were among the findings of Certified Public Accountant Karl Haiser, whom the village council hired in May by a vote of 3-1. Doug McAbee voted no.

"I was retained May 25 to review the budget for 2011, to see if there was any deficit spending or loss of fund balance," said Haiser. "I didn't find any of that. I did find that because of all the board goofiness and accusations, termination of an employee, and recall, they ran up legal fees. With disruptions like this, legal fees go up... They will have a loss, but it's traced to loss of revenue, legal fees, and a special study by Plante Moran. When all is said and done, I will have a prepared statement for the next meeting. There is no basis for any allegations of deficit spending or loss of fund balance."

Haiser, who also works with the FBI as a fraud examiner and has worked for several municipalities in the state, said his analysis of Lewis & Knopf's village audit reports revealed the general fund balanced increased for the fiscal year ending June 30, 2009 by $50,367 and by $50,998 for the fiscal year ending June 30, 2010.

However, issues including the termination of Village Administrator Jakki Sidge, recall of former Council President Patricia Wartella, and challenges over current Council President Doug McAbee's failure to sign the oath of office have led the village to incur legal fees more than $24,000 over budget.

In addition, the village used $15,000 not in the budget for a special study by Plante Moran for a future financial model for the village. The legal fees and special study, combined with $34,000 in lost state revenues will lead to an estimated fund balance loss of $73,117.

Still, Haiser anticipates the fund balance as of June 30 to be $205,777, or 29.2 percent.

"That's a good number," he said. "It's recommended they have between 15 to 20 percent...They've been operating efficiently according to audit reports and my analysis. They should drop all this— let's cooperate and go forward. I think we have employees and a system that's working. Let them do their job and go forward."

McAbee questioned Haiser's findings.

"I think he is incorrect," he said. "We have transferred money from the savings to balance the books. I hate to be the lone wolf in the woods always crying, but we're down to a little over $200,000 in savings and we transferred money to cover... We're dancing and celebrating, and yet the savings is shrinking year after year."

Haiser was paid $2,800 to provide his report and will do a formal presentation at the next village meeting, 7 p.m., Aug. 8. He has agreed to continue to provide his services until Sept. 15 for an additional $2,800. His 2011 fund amounts are budget estimates and actual results are subject to the Lewis & Knopf audit in August.

Haiser did not foresee any outside state or country intervention, monitoring or financial oversight at this time, or any violations under the Deficit Reduction Act of Michigan.