Source: Sherman Publications

Remove Images

Deficit fix for Independence

by Trevor Keiser

September 21, 2011

Independence Township trustees hope they've officially closed the door on deficits.

"Final lesson learned," said Trustee David Lohmeier at the Sept. 6 board meeting. "Closing on a $3 million dollar building without your bookkeeper in the room is not a smart move."

The State of Michigan required the township create a deficit elimination plan to account for $27,275 in the "internal service fund," said Finance Director Susan Hendricks.

The deficit occurred in 2008, when the township purchased its township hall, Hendricks said.

Total cost was $2,727,275.

"The township simultaneously executed a transaction that transferred $2.7 million to the internal service from water and sewer funds," she said. "This resulted in a cash shortage of $27,275."

Hendricks said the money came from the general fund at closing, but was never recorded.

Treasurer Curt Carson said it was a bookkeeping error.

"It really had nothing to do with money, the money had already been spent it just hadn't been recorded in the right spot," Carson said. "It's all done, fine, it's good."

"This is the first time it's made sense to me working through this and how we're going to correct it," Lohmeier said. "This the first time we went back to the error and said, 'this is why.'"

The Dec. 31, 2010, general fund balance was $2,666,272.

Hendricks spoke with Harlan Goodrich, manager of the local audit finance division for the state, and he said the plan would settle the issue.

"Obviously he has bosses," Hendricks said. "But he has indicated to me this is what they're looking for."

Trustee Mark Petterson's glad they fixed the problem, but still concerned.

"I'll be very, very surprised if these same things don't show up again, maybe not from the same fund, or for the same reason, but in different areas," Petterson said.

"I'm not happy it took this long to discover and not happy the mistake was made originally," Lohmeier said.

"It's a really ridiculous accounting error, but not worth trying to find blame," he said. "It's just one more thing we've had to fix with a poorly done deal."