HAMMOND | The city overpaid three public safety workers while on extended leaves, according to a state audit released Thursday that also noted a case of conflict of interest in the Hammond Port Authority and overdrawn accounts.
State auditors found three public safety employees received more than $130,000 combined in excess salaries from 2009 to 2012 while on leave. City Controller Bobby Lendi said auditors have not responded to whether they'll seek reimbursement for the city.
The overpayment is one error noted in a 100-page audit of city finances for 2011 by the Indiana State Board of Accounts, which showed the strain lower-than-projected property tax collections can place on the city.
“There were a couple of issues,” Lendi said of the audit. “We have over $120 million worth of transactions every year.”
Lendi said auditors did note that Hammond's financial statements are reliable and complete, which he said is important to show the public.
“At the end of the day that's what the State Board of Accounts said they were,” Lendi said.
According to the audit, agreements with the city's police and fire unions allow the mayor to grant leaves of absence to full-time police officers or firefighters.
However, no names were submitted to the mayor, so the leaves were calculated at full pay, and, in certain cases, included compensation for longevity increases and “active pay” incentives given to employees for fulfilling their duties, the audit states.
Auditors also took issue with what they described as discrepancies between the ordinances the Hammond City Council passes annually governing employees' salaries and compensation actually given. In one case, auditors found police lieutenants were overpaid a total of $11,781 in 2011 per the salary ordinance.
Yet, Lendi explained those employees are paid based on the union contract, so no overpayment actually occurred.
On the Hammond Port Authority, auditors found the Port Authority Board bought a $37,500 concession stand from fellow board member Gus Iatrides, but no disclosure statement was filed.
In response, Richard Szany, the Port Authority's finance director, said Iatrides had been given the disclosure statement to fill out as soon as possible.
The state audits also lists 24 funds either with cash or investment overdraws by the end of 2011.
Auditors warned, “routinely overdrawn funds could be an indicator of serious financial problems” that Hammond should investigate. Later in the audit, the state listed five funds where disbursements exceeded appropriations based on the budgets approved by the City Council and the Department of Local Government Finance in 2011.
Lendi said any overdraws were the result of property taxes coming in at a lower amount than expected.