State audit notes overdue taxes, council pay errors in Gary in 2011

2013-01-07T18:30:00Z 2013-01-07T22:46:04Z State audit notes overdue taxes, council pay errors in Gary in 2011Chelsea Schneider Kirk chelsea.schneider@nwi.com, (219) 933-3241 nwitimes.com

GARY | Issues with overdue property taxes on an affordable housing project, overpayment of Gary City Council members and questionable spending from a federal energy grant are among errors noted by state auditors in recently released reviews of several city departments.

All audits cover 2011, before current Gary Mayor Karen Freeman-Wilson took office.

The Indiana State Board of Accounts had told the city many of its concerns had been cleaned up, Gary City Controller Celita Green said.

“We are always working forward to try to make sure the city is as efficient as possible in all phases of our operation,” Green said. “We try not to have any audit exceptions. When we do, we try to make sure we do approach those out of concern and try to correct them.”

An audit of the city controller's office found the city had to pay $157,725 in delinquent property taxes on properties owned by the Broadway Area Community Development Corp., including the Madison townhomes.

The city used tax increment financing to pay the taxes, and because of those payments, the TIF fund over the Madison townhomes project didn't have enough money to pay bond holders, according to the audit.

Green said in the Madison townhomes case, a developer had an agreement with the city for the bonds to be paid out of the TIF fund. If funds are insufficient, it's the developer's responsibility to pay the bonds, Green said. The city plans to discuss the issues with the Madison townhomes manager.

The audit also found City Council members were overpaid $1,102 each in 2011 and a combined $1,242 in 2012. The mistake, a result of a staff error, was discovered in early 2012.

Current council members, along with former council members, instituted plans to pay the money back. The audit also found former City Councilwoman Ragen Hatcher was reimbursed $929.25 more for hotel stays than what the city's travel policy allows.

State auditors questioned a $2,109 catering bill paid out of a federal Energy Efficiency and Conservation Block Grant. The catering, provided at a Gary South Shore RailCats game in 2011, was marked as “economic development,” but it appears the grant shouldn't have been used to cover the cost, according to the state audit.

The city is implementing a new grant management program this year, which will provide training on documentation required to administer grants. The city has also added an extra layer of approval before purchases are made, Green said.

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