Chagrin Valley TimesAugust 26, 2021

Brian Doering

The Geauga Park District’s fiscal officer blamed a $1.9 million error in the $7.38 million annual budget on a “transposition” error.

Fiscal Officer Michael Frederick gave this explanation to the park board during a hastily called Aug. 20 special meeting just four days after Geauga County Budget Commission members scrutinized the park budget and pointed out the $1.9 million gap.

Park district Executive Director John Oros presented the budget during the county hearing on Aug. 16 but was unable to explain the inconsistent figures to commission members Auditor Charles E. Walder, Treasurer Christopher P. Hitchcock and Prosecutor James R. Flaiz. The commission ultimately reduced one of the park district’s 1-mill levies to 0.36 mill, saying taxpayers should not have to pay for unaccounted spending.

The budget was accepted, and the district cannot go back before the county budget commission again this year, Mr. Oros said.

Park board Vice President Pat Preston said the district should consider hiring a public accounting firm. “We have a lot of work to do, and we have to get our act together,” Mr. Preston said. “I feel like I’m failing in this job, and I don’t like that feeling.”

Mr. Frederick, who was not at the Geauga budget hearing, called comments and actions by county officials unprofessional and unfair.

“We made a transposition error right here, this is a temporary budget for 2021, we just didn’t move the columns over and that was my mistake and I take full responsibility,” Mr. Frederick told the park board.

Mr. Frederick was hired as the new treasurer and fiscal officer back in July after the park district severed ties with the county.

He went on to demonstrate to park board members using a PowerPoint presentation the errors made by not moving the correct figures into the correct spreadsheet columns.

“If you remove this column and the transposition error you would come up here, so this is 2020 actuals. The number will move up to the temporary budget for 2021,” said Mr. Frederick. “The total difference on every page equals up to $1.9 million from all the funds,” he said.

“The budget we presented wasn’t in compliance due to transposition errors because there weren’t two years of actuals for 2019 and 2020,” he said. “We revised that essentially just moving the columns on the right, that was the error.

“The beginning balance was off by $1.9 million essentially due to the transposition of all funds, and then we had some ticky-tacky things with numbers on specific line items,” Mr. Frederick explained. “We corrected those, but those weren’t material to the overall presentation.”

During the Aug. 16 budget commission hearing. Mr. Walder said he has discouraged Excel spreadsheet use for years. Based on the size of the park district organization, the county auditor recommended the use of accounting software programs.

“The park district has been doing it this way for years. Even when the county auditor was our fiscal officer, this was still the approach that was used and was OK,” Mr. Frederick said. “I’ve heard them say that multiple times and going over the past eight years, even with a different auditor was that they didn’t really like Excel, but Excel is a general business system, a Microsoft Office Suite, a normal process.”

Mr. Frederick then told board members that Mr. Walder questioned why the budget wasn’t submitted in universal account numbers, or UAN.

“Well, we didn’t have that when we submitted this budget and we didn’t have information from them to do it that way because they were still holding our information and wouldn’t give it to us,” said Mr. Frederick.

He was referring to early July when the park district severed financial ties with the Geauga County auditor and treasurer. When the county attempted to deliver boxes or financial documents, the park district initially refused to sign for them. Eventually the exchange was made through representing attorneys of the county and the park district.

Mr. Frederick went on to criticize Mr. Walder’s statement that the district’s budget was an “embarrassment.”

“Generally, people in our industry don’t use verbiage that way because it’s inappropriate and the language is demeaning. It is not the way you act,” Mr. Frederick said.

“We didn’t get due process in our budget,” Mr. Frederick said. “We should have the right to resubmit because of the transposition error. Taxpayers approve levies. For a budget commission to deny your vote where you want your money to go is wrong,” he said. Residents “shouldn’t have to put up with that.”

Mr. Frederick said that Mr. Walder just came up with numbers that he liked.

Mr. Oros, who presented the $7.38 million budget to the county commission on Aug. 16 that included an anticipated $3.575 million cash balance by Dec. 31, was accompanied by park board member Howard Bates and attorney Todd Hicks. No one from the park board financial staff was present.

Mr. Oros said one of the county budget commission members accused park district officials of conjuring up a need for spending. “I think our citizens, our taxpayers, our park supporters should really take that statement to heart and question that statement,” Mr. Oros said.

“This organization since I’ve been executive director, and I’m sure you can say this about the legacy of the past executive directors and boards, do not conjure up need,” Mr. Oros said. “We defined need in the form of three wonderful parks that were built out of our budget in Claridon Woodlands and Holbrook Hollows and The Maple Highlands Trail, the list goes on and on. Perhaps the budget commission should visit those parks.”

Mr. Oros said they have been blessed to receive since the beginning of 2019 about $2.7 million in unexpected revenue and shared that information with the budget commission.

“One of the members of the budget commission after making a motion to withhold the $1.9 million in tax collection and to approve our illegal budget, made a comment ‘I’m pretty sure they won’t get $2 million in donations next year,’” said Mr. Oros. “I don’t know exactly what that member of the budget commission meant by that, but that’s a shame.”

Mr. Preston expressed his concerns over the county budget commissioners’ comments on the park district’s capital improvement dollars. County officials said detailed plans linked to dollar amounts have to be in place for each project before they can be included in the spending plan, Mr. Preston said. “I don’t have any confidence right now that the stuff I am agreeing to is the right stuff to agree to.”

Mr. Preston said the park district needs better legal representation and to involve a public accounting firm for the board to make informed decisions on what is the correct way to represent funds.

“We just approved $3.5 million [for capital improvements] and [the county budget commission] said we need to have specific projects to address that $3.5 million” in spending, he said.

“We got a big wake-up call, and the players are the players. Walder and Flaiz are not ever going to be our friends, they are elected officials,” said Mr. Preston. “We were playing on their playground, so we have to do a much better job of what we’re doing. We’re losing the public relations battle severely and so I’m not happy at all with what transpired.”

Park board members then went into executive session and invited attorneys John P. Slagter and Jon W. Oebker from Tucker Ellis LLP to seek legal advice.

After coming out of executive session, the board members approved a motion authorizing Mr. Slagter and Mr. Oebker to provide legal counsel authorization and to engage consultants to evaluate the 2022 budget.

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