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For Immediate Release
Contact: Steve Halvonik 717 787-1381
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Auditor General Jack Wagner's Special Investigation Finds Borough of Elizabeth's Former Secretary Took More Than $15,000

Uncovers Improperly Issued Paychecks, Payments for Student Loans and Unearned Leave

HARRISBURG (July 14, 2008) – Auditor General Jack Wagner said today that a special investigation of the Borough of Elizabeth, in Allegheny County, found that the former borough secretary misappropriated $15,710 in borough funds by issuing to herself duplicate paychecks, adding unearned leave hours to her bi-weekly paychecks, and paying student loan debt with borough funds.

Wagner said the former secretary may have taken more funds, but investigators were unable to determine just how much more money may have been taken because the borough had been lax in monitoring fees that were collected by the former secretary from borough residents for trash collection and reimbursements from borough employees for personal cellular telephone use.

"Borough officials are responsible for safeguarding taxpayer dollars to ensure that funds are spent efficiently and are not wasted," Wagner said. "We hope that our report serves to prevent similar problems in the future."

Wagner’s Office of Special Investigations initiated the investigation in March 2007, after receiving allegations that the former secretary of the borough had misappropriated funds.

Due to the borough’s lack of oversight and monitoring controls to oversee basic accounting collections, the former secretary was able to obtain money belonging to the borough by failing to keep receipts and proper records of cash and check collections.

Wagner’s investigators found that the former secretary cashed seven duplicate paychecks totaling $4,135 that she wrote to herself from the borough’s payroll account; wrote nine unauthorized checks totaling $3,305 from the borough’s bank account to the Pennsylvania Higher Education Assistance Agency to pay her student loan debt; and claimed and was compensated for 836 hours of vacation, holiday, and personal leave that she was not eligible to receive as a part-time employee, totaling $8,270.

Wagner’s investigators also found that she misappropriated an undetermined amount of cash she received on behalf of the borough in the form of fees paid by borough residents for trash collection and reimbursements paid by borough employees for personal use of cell phones.

The former secretary resigned on Dec.12, 2006. Following her resignation, the current president of borough council assumed the responsibilities formerly completed by the borough secretary. Since the change occurred, the borough has experienced increases in the collection of trash collection fees and in employee cell phone reimbursements.

Wagner’s report made seven recommendations to correct the deficiencies, including:

  • The borough should establish a policy regarding pay advances to employees;
  • The borough should consider direct deposit of pay into each employee’s personal bank account, thereby eliminating the need for payroll advances;
  • The borough should establish better internal controls over disbursements, including unannounced bank reconciliations, reviewing canceled checks for payee endorsements, requiring two signatures on all checks, maintaining a log of all manually written payroll checks and periodic reviews of that log;
  • The borough should implement controls over the payroll system to ensure that pay rates are in agreement with borough policy and with employees’ established rates; and
  • The borough should require the use of pre-numbered duplicate receipts for all cash payments, and assign someone the responsibility to periodically compare the receipts issued to the bank deposits to verify that money was actually deposited into the borough’s bank account.

"Based on what the borough told us after reviewing our report, we commend the borough for the measures it has already taken to implement new controls on its financial operations and its commitment to fully implement our recommendations," said Wagner. 

He stated that his department would follow up at the appropriate time to confirm that all recommendations have been implemented. He also noted that a complete report of the investigative findings has been provided to the Office of the District Attorney of Allegheny County for its review and whatever further action it may deem appropriate.

A full copy of the investigation report, which includes the borough’s response, can be obtained at

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts more than 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s Web site at