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Auditor General Jack Wagner Finds Former Secretary Misappropriated $55,182 at 2 Allegheny County District Courts
At least $10,000 still unaccounted for at a district court in South Park
HARRISBURG (April 22, 2009) – Auditor General Jack Wagner said today that audits completed by his department determined that Kimberly Lehnhardt of Elizabeth Township, Allegheny County, misappropriated $55,182 of taxpayer money while employed as a secretary for two different magisterial district courts.
Auditors found that the former secretary improperly handled $1,133 at District Court 05-2-04 in Sharpsburg, where she was employed from May 4, 2000 to March 23, 2007, and misappropriated $54,049 at District Court 05-2-16 in South Park, where she was employed from March 24, 2007 to at least December 2007, when she was charged with theft. Auditors found that $10,005 still remains unaccounted for at the South Park district court.
Wagner said that the former secretary failed to make required deposits of district court funds, baselessly voided cash collections, and skimmed money that was never entered into court record-keeping systems. The misappropriated monies were not detected because of inadequate internal controls. He said that copies of his audits have been referred to the Allegheny County district attorney.
“As Pennsylvania’s fiscal watchdog, it is my responsibility to make sure that the tax dollars of hard-working Pennsylvanians are safeguarded against theft, fraud, or abuse,” Wagner said. “Every step should be taken to recover the missing funds.”
Wagner recommended that Allegheny County officials determine what actions should be taken to recover the missing funds, and establish and implement adequate internal controls over receipts to prevent further misappropriation of funds.
The audit of District Court 05-2-16 in South Park covered the period Jan. 1, 2006 to Dec. 31, 2007, and found that the former secretary failed to make required disposition of funds. Auditors found:
In addition, Wagner said the audit of the South Park district court also found that bank reconciliations had not been prepared since August 2007, and a listing of outstanding checks was not maintained.
The audit of District Court 05-2-04 in Sharpsburg, which covered the period Jan. 1, 2003 to Dec. 31, 2007, found that the former secretary failed to make required disposition of funds totaling $1,133, by voiding eight cash receipts for no apparent reason, thereby creating the illusion that the money was never collected.
Wagner said the misappropriation of funds could have been prevented if the district courts’ management had improved daily oversight and divided tasks among office personnel.
The former secretary had been responsible for collecting cash, entering collection information into the district court computer system, making voided transaction adjustments, preparing deposit slips, and issuing receipts without an independent, daily review, according to auditors.
“More eyes mean more protection of taxpayers’ hard-earned dollars,” Wagner said.
Wagner said that 14 different magisterial district judges served at the South Park district court during the audit period and that during this time numerous control weaknesses occurred, which contributed to the improprieties found in his audit.
Wagner recommended that the South Park district court separate the duties for handling cash and bookkeeping transactions, improve internal controls over receipts, and perform required internal control procedures over bank accounts. He recommended that the Sharpsburg district court implement adequate internal controls over receipts.
Wagner said that both district courts were cited in the current audits and in the prior audits of the district courts for the failure to follow arrest warrant and driver license suspension procedures. Warrants and requests for suspension of operating privileges are used to enforce the collection of monies on traffic and non-traffic cases in which defendants failed to make payments when required. Failing to follow these procedures established by the Magisterial District Judge Automated Office Clerical Procedures Manual increases the risk for funds to be lost, stolen, or misappropriated, and for fines to go uncollected, and offenders unpunished.
Full copies of the audit reports are available on the Department of the Auditor General’s Web site, www.auditorgen.state.pa.us.
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 www.auditorgen.state.pa.us.
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