Past East Chicago financial practices flagged, corrected

2012-10-10T13:20:00Z 2012-10-11T09:39:03Z Past East Chicago financial practices flagged, correctedSteve Zabroski Times Correspondent
October 10, 2012 1:20 pm  • 

EAST CHICAGO | Years of irregular accounting practices pointed out by state regulators have already been corrected, according to city financial authorities.

Items of concern ranging from multimillion-dollar accounts not included on city ledgers to a lack of inventory control in Park Department concession sales were identified in a State Board of Accounts audit released last week.

The state overview addresses city finances through December of 2011, and most of the activities noted in the audit have been brought into compliance, said City Controller Kimberly Anderson, who was named to the position midway through that year.

Among the state's red flags were bank accounts related to the Harborside Apartments, a 255-unit North Harbor rent-subsidized complex the city bought in 2009, which, according to the audit, "bypassed the city's record-keeping process."

The accounts, with annual receipts of $2.4 million and year-end balances of $1.4 million, were controlled by the city's Department of Redevelopment and not reported in city accounting records or in the city's annual report, according to the audit.

That money is now included in the city's financial system, Anderson said, after she brought the matter to the attention of Mayor Anthony Copeland last year.

Redevelopment is also adding a full-time accountant to its staff, and last month contracted with an independent certified public accountant to develop a system to record its financial transactions, said Redevelopment Executive Director Maria Becerra.

"We are going to be as transparent as possible," said Becerra, who took over the department in June from John Artis, the head of redevelopment in the city since 1978. "We want to be swift in addressing these issues."

Becerra said she is proceeding with other state recommendations, including the closure of dormant bank accounts and the initiation of collection actions for money owed the department, in some cases dating back more than a decade.

Interim Park Director Frank Rosado has also set up an inventory system to account for park beverage and snack concessions when the facilities reopen next year, Anderson said.

"I think we did a pretty good job cleaning up," she said. "We've put a lot of effort into turning things around."

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