24/09/2022

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Ohio Auditor issues findings for recovery against former City of Marion auditors

The Ohio Auditor of State has issued findings for recovery against two former auditors of the City of Marion.

According to a report released on Thursday, the state has issued a finding for recovery in the amount of $154,399 against former Auditor Robert Landon III due to the fact that beginning in June 2020 income taxes from “city employee earnings” were “erroneously remitted to the State of Ohio rather than the IRS, as required.”

Landon, a Republican, served from January 2020 to October 2021, resigning from office amid the turmoil of a feud with members of city council and the administration and investigation of Marion’s finances by the Ohio Auditor of State. Landon claimed during his short tenure that he was the victim of political attacks by Democratic Party members of city council and the administration.

More: Always under attack: Robert Landon’s rocky road as Marion City Auditor

More: Crawford prosecutor won’t bring charges against former Marion City Auditor Robert Landon

More: Robert Landon ousts Kelly Carr as Marion auditor despite Election Day criminal charges

The state auditor’s report also details a finding for recovery issued against former Marion Auditor Kelly Carr in the amount of $22,500 “for penalties that resulted from late filings of information returns (W-2s and 1099s) to the IRS in 2019 after her departure.”

Carr, a Democrat, served three terms as auditor from 2008 to 2020, losing to Landon by 302 votes in a tight race in the November 2019 general election.

The state auditor’s report on the finding for recovery against Landon states that “beginning in June 2020, the City erroneously remitted the federal income taxes to the state. The error was not identified and corrected in the system until January 2021. As a result, the City incurred $154,399 in late fee penalties and interest, which were paid by the City in October 2021 after Mr. Landon’s resignation. These incurred costs were unnecessary expenditures that did not serve a proper public purpose.”

In the section of the report about the finding against Carr, the report states that “During her term in office, the City Auditor’s Office filed the 2018 information returns on February 20, 2019, which was after the January 31st filing deadline, thus incurring a $50 penalty on each of the City’s 450 returns for a total of $22,500 in penalties from the Internal Revenue Service (IRS). The City received notice of these penalties and remitted payment to the IRS in November 2020. These incurred costs were unnecessary expenditures that did not serve a proper public purpose.”

An Ohio Auditor of State spokesman said that collection of the finding for recovery is the responsibility of the local prosecutor and the Ohio Attorney General. The spokesman also noted that there is no appeal process once the audit is finalized. He explained that the “appeal or discussion process for issuance of the finding is completed during the audit and the FFR (finding for recovery) is now finalized.”

Landon issued a statement on Thursday morning following the release of the state auditor’s report, stating that he did the best job he could while in office.

“When I was elected to City Auditor, I did my best to hire experienced professionals who had a combined experience of approximately 100 years in the accounting and financial sectors,” wrote in the statement. “Obviously, I still fell short by not catching an error sooner than it should have been. I can only apologize to those who entrusted me with this great responsibility that I wish it would have never happened.”

Landon went on to state that he believes the finding for recovery should be applied to more city officials than just him.

“I disagree with the Auditor of State’s finding because the monthly bank reconciliation process involved both the City Treasurer and City Auditor’s Office,” he wrote. “More than 3-4 people reviewed the monthly bank statements daily. If the finding of recovery stands, it should include all responsible parties, and not just who is the easy target.

“As previously stated, I understand mistakes must be owned by leaders, and I have done so. However, at what point to we make every leader responsible for the actions of those underneath them. When a Utility Department worker stole money roughly seven years ago, nobody called for the Mayor to be personally responsible, even though this person ultimately reports to the Mayor and his administration.”

Mayor Scott Schertzer has been a harsh critic of Landon’s performance as city auditor. He said the state auditor’s report and finding for recovery only cemented his view of the controversy at City Hall during the past two years.

“Well look, this is my 24th year in Marion municipal government and this is unprecedented. I’ve never seen anything like this before,” Schertzer said after the report was released on Thursday. “And unfortunately it goes back to the quality of the individual that was elected to the city auditor’s office in the 2019 election. That individual was not qualified to do the job and this state audit finally exposes his incompetence, his dereliction of duty, and I just sincerely hope that he will be held accountable for his inactions while in office that led to a $154,000 and change finding for recovery.”

Schertzer said, in his opinion, the finding for recovery issued against Carr can also be blamed on Landon.

“In regard to the other finding, had Mr. Landon been qualified in doing his job on day one when he got in office, he would’ve caught the erroneous mistake made by Auditor Carr,” Schertzer said. “Auditor Carr wasn’t even here to defend herself. She wasn’t here to appeal the finding. In fact, she was really not aware of anything that was wrong when she left the office. But that’s what the new auditor (Landon) should’ve been able to catch had he been reconciling the books on day one when he got here and having we now know never reconciled the books according to the general accounting practices.”

Landon also noted in the statement he issued on Thursday that he was the victim of political attacks by local Democratic Party members on city council and within the city’s administration.

“While I have remained silent because I focused on my health while recovering from Covid-19, it is astonishing to see the continued efforts of attacks,” he wrote in the statement. “I have never experienced more cowardly attacks from anyone than when I was attacked by Democrats while fighting for my life. Unfortunately, they could not allow their better natures to prevail, if only for a short time.

“Last year, I had brought to light the $100 million trial balance errors that had occurred over a 12-year period during my predecessor’s tenure, to no avail. … I never brought this information forward to deflect accountability from myself — surely the Democrats would not have allowed that anyway. But, it was important to bring up because it brought to light the Democrats hypocrisy — and protection of their friends.”

Landon concluded his statement by noting his error and expressing his hope for a change in the local political landscape in Marion.

“I share this again because it is important for the people who elected me to know the truth,” he wrote. “Yes, my team and I made a mistake. For that, I am truly sorry. But we cannot move forward as a community by pretending that our politics are sustainable, and not holding all accountable. It is my sincere prayer and hope that Marion’s best days are ahead, only if we can capture the vision of unity and civility once again.”

Schertzer said there is a great need for qualified individuals with the skills needed to operate the city’s various departments to run for public office in Marion.

“My hope is whenever there’s a municipal election for a city auditor that we have at minimum two qualified candidates competing for that office,” he said. “And that the voters will ultimately decide of those two qualified candidates who is the most experienced to do the job. That did not take place three years ago and I hope it takes place in the future.”

The Ohio Auditor of State report includes a corrective action plan that new City of Marion Auditor Miranda Meginness will implement.

The complete report by the state auditor can be found at ohioauditor.gov. Click on the “Search Audits” tab.

Email: ecarter@gannett.com | Twitter: @AndrewACCarter

This article originally appeared on Marion Star: State issues findings for recovery against former Marion auditors