Forensic audit raises suspicion
Plante Moran auditor Martin Olejnik and Senior Manager Eric Conforti presented Hilltop Golf Course forensic audit to the Plymouth Township Board of Trustees.
Jun. 27, 2017 PLYMOUTH EAGLE.
Plymouth Michigan News
An audit of the financial records of Hilltop Golf Course has discovered multiple irregularities, according to a report presented to members of the Plymouth Township Board of Trustees last week.
The forensic audit, performed by township outside auditing firm Plante Moran, was presented to the trustees during a scheduled study session. The findings included what appear to be duplicate billings, fictitious invoices, questionable purchase orders and the potential manipulation of address data, according to the report.
“The former treasurer manipulated the BS&A (accounting software system) in a way only he could understand,” said Township Supervisor Kurt Heise after listening to two Plante Moran audit presentations.
Using a process called “Geocoding” to compare the golf course vendor addresses with golf course employee addresses, auditors discovered various anomalies within the collected data. One audit finding identified three unique addresses shared by six Hilltop vendors and three township employees. One shared address was 47000 Powell Road, the address of the Hilltop Golf Course. Auditors said there were four vendors in the master vendor file that used the address. They also said they found a number of township vendors in the master file which did not have vendor names.
Plante Moran auditors suggested the township investigate the matter further.
“These payments should be researched by the Township to ensure their validity,” noted the written report. “The Township may want to research the payments to these vendors to verify that Hilltop was not reimbursed for expenses that were paid by the Township, i.e. verify the Township did not pay the same invoice twice.”
The auditors examined check registers from the golf course management company, Billy Casper, and township records. Sorted by vendor, the 10 highest paid vendors in fiscal years 2015 and 2016, were identified. Records show the amount paid by Billy Casper during the period, $535,000, exceeded the total invoices ($387,000) by $148,000. The Plante Moran commentary reads, “It appears, based on follow-up information (invoices) provided by Billy Casper, the variances are caused when a check pays multiple invoices…”
Plante Moran auditor Martin Olejnik told the trustees, “We don’t make any judgment if they’re proper or appropriate.”
Auditors looked into select invoices that were paid by the township related to Hilltop. The invoices from vendor, SRRAB, Inc. of Livonia were for bathroom renovation in McClumpha Park.
The state Department of Licensing shows Sam Baki, 55, as resident agent of SRRAB. Baki is listed as an active licensed Realtor. According to those state records Baki held an individual builder license that lapsed in 2006.
The auditors reported that statement numbers on the top of the invoices did not match the statement numbers at the bottom and highlighted inconsistencies in the invoice format between invoices created on the same date, for the same 2015 work project that SRRAB invoiced in mid-May 2016. In addition, the auditors flagged duplications in work item descriptions on several SRRAB invoices. Plante Moran commented, that the inconsistencies in invoice formats are “sometimes characteristic of a fictitious invoice or vendor”
Former Township Parks and Recreation Manager Mike Mitchell authorized the purchase orders assigned for the SRRAB work. Baki was a former Republican State Committeeman for the 11th District while Mitchell was 11th Congressional District Party Chairman. Mitchell’s township employment was terminated in November 2016 after his long absence from work constituted job abandonment.
In all cases the SRRAB invoices totaling $12,282.50 were issued preceding the date of the respective purchase orders, possibly indicating the authorization was given in advance before receiving purchasing approval, auditors indicated. In one case, the audit indicated a SRRAB invoice totaling $4,760 was paid without a purchase order authorization.
Township Clerk Jerry Vorva said the new board has implemented changes to the purchasing system, now closely monitoring all expenditures.
Vorva said there is a pending court action filed by the township naming Baki and his corporation SRRAB in an effort to collect $3,652.87. An affidavit signed by Vorva and filed in the 35th District Court alleges that Baki’s careless excavation while working in McClumpha Park in August 2016 installing a wooden fence severed cable lines owned by Wide Open West (WOW).
Township Supervisor Kurt Heise said that there was no contract, permits, bonds or certificates of insurance filed with the township by the contractor for the township work and collection letters sent by the township attorney went unanswered. The case is scheduled for a hearing on July 24 before Judge James A. Plakas.
“It’s losing money, it’s not a great golf course. With this audit we’re going to have to look at if it’s sustainable,” Heise commented after reviewing the audit comments.
Photos: © Don Howard / Associated Newspapers