Friend Responds To Mayor Winnecke On Facebook

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    Dear Mr Mayor,

    City Councilman John Friend
    City Councilman John Friend

    In response to your criticism concerning my questioning of your Utility Director, Mr. Allen Mounts, in the month of November of 2014, Councilman O’Daniel and myself attended an exit conference. The attendees were Jennie Collins, CFO, the field examiner and his supervisor, Russ Lloyd and Allen Mounts. The field examiner passed out the proposed Utility Financial Statements for discussion. During my review of those Financial Statements I immediately noticed that the Utility Department had omitted the amounts owed by the City, i.e. when the SBOA required that the City and Utility checking accounts be separated in June of 2012, the Administration failed to pay the Utility approximately $2,000,000. In other words, shorted the Utility in the transfer of the Utility’s money into the newly created checking account of the utility. So, the City kept this money until December of 2014; however, the receivable was left off of the utility financial statements that were passed out that day.

    The field examiner immediately confessed that he missed it!! I said that this was the responsibility of the Utility to prepare the Financial Statements to assure their accuracy and completeness. Then Russ Lloyd said “it does not matter because the City is on the cash basis…but I informed him that the City was going to present the December 31, 2014 financial on the accrual basis so the amount owed by the City would have to be recognized.

    After that discussion, we moved to the cash short situation. The field examiner indicated that your books recorded receipts however those receipts did not agree to the bank records and the term used was CASH SHORT…now, in my world this is a simple concept, the cash register says we had sales of $1,000 and only $800 is recorded as deposited on the bank statement and you have only $100 on hand, well you are $100 SHORT…maybe supplies were paid out of the cash draw and that is why we have the shortage situation or maybe the clerk took the money…
    Before Councilman O’Daniel and I let the meeting, we were required to sign a confidentially agreement that the meeting subject matter would be held in strict confidence until the report was released. Unfortunately, due to my very busy tax season, I have been preoccupied and suddenly realized that the report should have been released to the public. After visiting the State Board of Accounts website, I obtained a copy of the report and noticed that the CASH SHORT finding remained in the document.

    So, in my audit world when our firm discovers client cash shortages exist, our clients generally start an investigation into the cause and circumstances and institute procedures to remedy future occurrences. Why would your Utility be an different? Most people would think that if told that a CASH SHORT situation existed, an investigation into the causes and final outcome would be in order? Of course the auditors are NOT investigators, they are examiners. Our firm, after auditing an organization, has been interviewed by investigators…my question was very simple, “What is the status of the investigation” meaning I was doing my job as an elected official to oversight, remember those nasty checks and balances and assumed you would be doing your job safeguarding the treasury. I fully expected to hear the findings, causes, and procedures implemented to prevent future occurrences. I’m puzzled why you are focusing so much on my question and more amazed that $400,000 is unaccounted for and you did not institute your own internal investigation!! Apparently,not because Mr. Mount’s only response was “that was over a year ago” but oddly enough the report findings posting to the public is only 60 days ago…and he said “I has been taken care of” How has it been resolved? What procedures implemented? Any irregularities? I guess we will just have to accept the fact that $400,000 is immaterial in your world. I must emphasize that I said investigation, not CRIMINAL INVESTIGATION!!

    PLEASE TAKE TIME TO READ OUR READERS POLL QUESTION AND CAST YOUR VOTE ACCORDINGLY. 

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    18 COMMENTS

    1. +1,000 Friend
      -1,000 Winnecke

      “I’m puzzled why you are focusing so much on my question and more amazed that $ 400,000 is unaccounted for and you did not institute your own internal investigation !!”.

      Great point !

      • Isn’t that what they did to SBR? They attacked her for asking too many good questions and exposing the corruption at city hall.

        • This is how they roll…anybody that challenges Winnecke abilities (or points to his incompetence) they will try to destroy….many have said that Winnecke should have rid himself of Schaefer…this man is impulsive and very immature…he has NOT served this Administration well…Fired from the Chamber and silently dismissed from the Brusheon organization….great resume!!…Mr. Mayor, you are only as great as those who you chose to be surrounded by…

      • If a city councilman, sometime chairman of the finance committee, became aware of “missing money” or “misuse of public funds” during an exit interview by the SBOA, shouldn’t he have followed up in a timely fashion to discover the outcome? I mean like before now?

        If he truly believed there was wrong doing, and nothing was done to his satisfaction, shouldn’t he personally have initiated an investigation on behalf of the financial branch of city government (the council) well before he became a principle officer in the Giddy for Gail campaign?

        Yes, his snide comment and sneak attack during last Monday’s council meeting was nothing but pure partisan politics.

        Then again, his inability to discern the difference, even after having it explained multiple times, between an agenda for an upcoming meeting and minutes of the meeting sort of robs him of credibility regarding cognitive skills anyway.

        • My dear scheafer….regardless of the timing…what procedures have been implemented…nobody has been told…the only response was it was too different to reconcile because we were handed a bucket of crap and we do not have the expertise to determine what happened to the 400k..even though you have spent over $2,000,000 with the Umbaugh CPA firm since Winnecke has been mayor…what the hell is that!!! It takes over six weeks to get your financial statements out to the public…hell, man…by the time the public is aware of what the hell you have been doing or lack thereof the next month after the awareness has the same crap….sources indicate your Monday morning meeting NEVER address any financial aspects…you guys are must like a ship without a rudder…you have know idea were in the hell you have been and more importantly, were you are going….you guys have screwed around with this hotel for nearly 3 and one half years…spent countless taxpayers dollars…and how long has it been since the day in the sand..ground breaking…March 10, 2014…yes not 2015 but 2014….Can we expect more to come??

    2. Headline should read:
      Friend responds to Mayor Winnecke on Facebook

      Although the details are listed in the story above …this reader will never understand finance as it seems to manifest in this town. I do understand that the City Council has responsibility to the taxpaying/voting Public to look after our financial interests. There will never come a time – when it’s more clear – more ripe – or more compelling than NOW to pull the drawstring on our virtually empty purse of Public Treasure. As Mr Friend strongly suggests – an investigation is in order. One with a friendly tone and on a fact-finding – not a blame laying mission. Continuing along the current course is sure to devastate this City and her people …burying the memory of what Evansville once stood for and once was.
      COUNCIL … DO YOUR JOB! …

    3. John Friend has been on the City Council for 8 years. During those 8 years, every SBOA financial compliance audit or review has cited the City of Evansville for depositing Water Department funds into the city General Fund.

      Where was John Friend for all those years? Water Department funds are the Meth that the City is addicted to in order to straighten out shortfalls in other areas of the city budget. PILOT taxes are the new “legal” way in which the city is expected to get their hands on Water Dept. revenue, as those taxes can be added to the end user’s bill.

      The people running the Water Dept. have been in those jobs far too long. It is time for new people who posses the required skills. and the ability to operate within Indiana statute, to be appointed to those positions.

    4. Criminal investigation is warranted by criminal behavior. If anyone of us had written a check with his mouth that his arse couldn’t cash=an a## whoopin’.

      THESE BOOBS ARE IN CHARGE OF OUR MONEY, THEY ARE LYING ABOUT WHAT HAPPENED TO IT, AND SO CALLED “PROFESSIONALS” CAN’T ACCOUNT FOR OUR FUNDS. ALL i CAN SAY IS IT’S CRIMINAL BEHAVIOR

    5. Who currently is managing the checkbook for the Giddy for Gail campaign? Is it tax-season-overburdened-CPA Johnny? Or is it Woody the attorney-and-local-pol-media-mogul? Just wondering.

      Who will sign the Giddy for Gail campaign finance report as the person managing the finances and responsible for the accuracy of the finance report? Will it be the person who actually manages the campaign checkbook? Or will it be someone who is trying to assume a leadership role in the local Democrat party while at the same time trying to appear to be objective, yet appearing to provide a launching pad for criticism of targeted Democrat candidates who do not appear on his podcasts?

      Will the CCO be publishing a link to the Giddy for Gail campaign finance report?

      • Reports indicate that the SBOA exist conference was held in November 2014 and the attendees were required to keep their mouths closed and the report was released on February 2015, sixty days ago and the only response is criticism directed at the messenger….evidently you must have plenty of cash because you apparently think 400k is chump change…..what is also so amazing the Pooh does a mid-night raid on the Utility’s money a mere 2.4 million which happened on December 29, 2014 and in the past two weeks we have just heard about this..why…because it took the Pooh over 90 days to release the Annual Financial Report to the Council and the Public….hell corporate reports are release within 30 days from year’s end….

      • Hey, Steve…how is the new chapter of “Focus on the Chicks” coming along???

    6. Bubbageek: above you said “this reader will never understand finance as it seems to manifest in this town”.
      Let me try something. When it comes to the budget, the Mayor writes the full budget including all expected revenues and planned expenses. The City Council cannot add anything to this budget. They must only approve or cut figures. If they feel an expense is high – cut it. If they feel a revenue is estimated too high – cut it. That’s really all the power they have in terms of the budget – basic oversight. Once a budget is agreed to, the State must then approve the budget. They do this through the Department of Local Government and Finance. The DLGF has the ultimate say in the final budget – what they say goes.

      It’s my opinion that our council has tried to play the role of executive committee rather than good stewards. They have not made sure that adequate reserves and budget surpluses have been properly planned. The lack of planning goes back well be LW. They have allowed balanced budgets to get passed which sounds well and good, but remember all budget revenues are only estimates not guaranteed revenues. So if a balanced budget is passed but only 90% of revenues are realized you’re not balanced at the end of the year. This is how and why cash reserves get used. I refer to the City Council as an executive committee because they have their own pet projects that require funds and quite plainly, it’s not their role to write them in. Officially the Mayor’s office writes in new expenditures but if you watch the budget hearings you will see that more time is spent discussing projects rather than adequate budget margins.

      As far as the water dept and other funds being comingled in the same checking account, John Friend has explained this a million times and he did so at least five years ago (well before LW took office). Comingling the funds is a way for an entity to borrow from itself so interest expense and accounting entries can be bypassed. Think about your family’s budget. Assume you have two funds: one for home expenses and another fund for vacation. You plan to put $100 per month in your vacation fund. and in your home expense fund you put $1000 per month. In April you want to take a $1200 vacation but there is only $400 in the vacation fund. No problem, because the vacation fund and the home expense fund are comingled in the same checking account. Just spend the $1200 (making the vacation fund go negative) and over the next 8 months the vacation fund will be restored to zero with the continued $100 planned savings. Essentially the vacation fund borrowed the cash from the home expense fund. However, there never had to be any bank transfers or accounting entries to make this “loan” occur.

      OK – I’m starting to feel like I’m rambling. I’m getting that John Friend/Conner O’Daniel itis that makes you go on and on and on and on……

      • Great explanation! Don’t forget though, department heads are constantly making transfers from one budget line to another not just to cover expenses plus unanticipated overruns. In the fourth quarter, they also transfer unused money from one budget line to another in order to spend the lump sum departmental appropriations so the council will not see the reality that they cut an amount equal to the unspent 2013 departmental appropriations (for example) from the 2015 budget. Use it or lose it is the common budgetary practice in government.

      • Question: Who has check writing authority over the people’s money….who on city council has that authority? SBR said it so well during the last council meeting…it is Winnecke’s budget, it is his revenue forecast…obviously, Winnecke needs to enhance his collection efforts…in Winnecke World the modo is “we possibly can not be out of money because I still have checks” Or, maybe the spending plan which has been in the offing since last July, according to reports will replaced with the “Revenue Enhancement Plan” code for bend over and tough your toes…elimination of the Homestead Tax Credit which the Pooh is very familiar and higher fees for services…So, keep your arms and legs inside this fast moving vehicle and by all means belt up your financial seat belt…as Weinzapfel posted 27 million in the RED and it will be growing…just think 8 years of Winnecke World and that number will be 72 million…but don’t be surprised…when Russ took over the helm after McDonald left…ol Frank left Russ nearly 50 million in reserves and when Weinzapfel took office he was left with only 200k in the General fund and the 50 was done…

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