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Cash Delivery Following Arrest of Pennsylvania State Employee DuBois Spotlight PA State University

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DUBOIS — On a typical Tuesday in early May, DuBois’ attorney showed up at City Hall with $93,920 in cash packed in a cardboard box and wrapped in a gift bag.

Attorney Toni Cherry pulled DuBois interim city manager Chris Nasty and police chief Blaine Clark from the meeting. Nasty said she handed them a bag of gifts and told them the $20, $50 and $100 bills belonged to the city. She advised them to deposit the money, but did not explain why or how the money came to her.

“Of course it was a surprise,” Nasty told Spotlight PA. He and Clark said they immediately moved the cash into a new bank account that was insulated from other city funds and reported it to the state attorney general’s office.

The mysterious provenance and treatment of a bag full of cash is at the center of a new storm in a community already rocked by a disastrous corruption scandal.

Earlier this year, one of the city’s most politically connected government officials, former city mayor Helm Spritzio, was arrested.

Spritzio is accused by the state attorney general’s office of stealing more than $600,000 in taxpayer money for nearly a decade, but the charges raise thorny questions about how it was stolen. ing. large scale theft It’s possible to play unnoticed in a city of about 7,400 people.

Spritzio’s attorneys have declined a request for comment from Spotlight PA, and he has not yet pleaded in the lawsuit or appeared in court.

The sudden appearance of about $100,000 in cash only adds to the sense of unease in Dubois (a small city about two hours northeast of Pittsburgh), and calls for accountability mechanisms in place in Pennsylvania’s local governments. Questions have been raised about its effectiveness.

“Not at all normal”

Residents of Dubois learned of the cash’s existence when they were questioned about it by residents at a city council meeting on May 8, in which Mr. Nasty was present.

“I don’t know where the money came from,” Nasty said. “It was brought here. Chief Clark and I took it to the bank. We secured it and opened a new account. [The] Money is secured there. The Attorney General knows we have the money. So there it is. ”

Cherry declined to comment when contacted by Spotlight PA.

Interviews with Nasty, now a former city councilor, and several DuBois residents, as well as a statement from a local nonprofit, provided further details. But most city officials were appalled by the gold discovery and apparently unable to answer fundamental questions about it.

Nasty said Cherry only told him the money belonged to the city’s “community fund,” referring to a bank account linked to DuBois’ annual summer celebration called Community Day. It says. She declined to say how, when, or from whom she got it.

City officials learned from other sources that the cash was held at the DuBois Area United Way, a local nonprofit. At the Dubois Area United Way, Mr. Splitzio was until recently the Executive Director.

Shannon Gabriel, who was a DuBois City Councilman until late last week, was also told that a hidden cash safe had been found in the ceiling of the United Way. In a statement, the charity confirmed there was a locked box in the building. Neither the charity nor city officials said they knew who put the box there and why. It also doesn’t know if the $93,920 was in those locked boxes or if the cash was stored elsewhere at the nonprofit.

One thing is certain, Gabriel told Spotlight Pennsylvania, “This is not normal at all.”

Days after the city acknowledged the existence of the cash at a public meeting of the city council, the Dubois District United Way issued a statement providing an elaborate timeline showing when it learned the cash was stored in the building and what happened next. announced.

But the statement raised as many questions as it sought to answer.

In it, United Way officials said they “noticed” that cash had been removed from the group’s building near downtown DuBois on March 22, two days after Splitzio’s arrest.

Officials said the cash was not United Way money and they did not know how or why it came to be stored in the building.

Cherry also knew about the cash in late March, a full six weeks before it was dropped at City Hall, the statement said.

According to United Way officials, Cherry left a voicemail to the nonprofit’s lawyer on March 28, in which the cash was from a “community fund” and was removed from the building and taken to his own home. It was written that he was instructed to bring it to a place.

The statement did not say who or when Cherry ordered the removal. Representatives for United Way and attorneys for the nonprofit didn’t respond to requests for comment.

“Community Fund” means bank accounts associated with the celebration of Community Day. Weekend celebrations celebrating the town’s history, especially the volunteer fire brigade, are funded by city funds and private donations.

In the corruption case against Splitzio, law enforcement officials alleged that Splitzio siphoned tens of thousands of dollars from these accounts, diverted them into personal bank accounts, and used them to pay credit card bills and make political contributions. The indictment against Splitzio alleges that Splitzio wrote checks from these accounts, cashed them, used some of them for festival expenses, and diverted some of them to himself.

These accounts were not part of the city’s computerized financial system prior to the Splitzio arrest, making it difficult to track funds flowing into and out of the accounts.

Gabriel resigned from the city council last week, saying his personal safety and overall well-being were in the best interest. She said she had previously been frustrated with Cherry’s silence about her money. She said the city of Dubois typically doesn’t handle large amounts of cash and usually accepts payments by check or electronic means.

She said the lawyer remains blind to city officials, even though her job requires her to advise them.

“It’s mind-boggling,” said Gabriel.

Mr. Cherry refuted allegations of corruption against Mr. Splitzio, telling city residents at a public rally that “there is no money missing.”she told the courier Investigators said they ignored information provided that contradicted the allegations.

The Attorney General’s Office “is not interested in truth. They are not interested in common sense. They are interested in grandstanding,” Cherry told the magazine in April.

Gabriel, who has spoken out critically about the city’s surveillance issues exposed in Splitzio’s arrest, said Cherry wrote a voice message to one of his relatives on social media complaining about Gabriel’s candor. said he left.

“I asked you to keep Shannon off Facebook and you won’t do it,” Cherry told Gabrielle’s relatives in a voicemail. This voicemail was shared with Pennsylvania State Spotlight. “I don’t think the girl understands that she is her own worst enemy.”

At the city council meeting on May 8, Gabriel put forward a motion to terminate Cherry’s employment, but the effort fell through with none of his colleagues supporting him.

Ming Xiang / Spotlight PA

DuBois City Hall at 16 W. Scribner Avenue:

“Internal control issues”

DuBois, like other municipalities in Pennsylvania, theoretically has a system with a built-in mechanism to track funds going in and out of the local coffers.

Court records from Mr. Splitzio’s case show that the city has a treasurer whose primary responsibility is to make sure the city’s accounts are balanced at the end of the day. The treasurer also collects all money paid to the city and makes sure that those funds are deposited into the correct bank accounts. Legislators prepare and submit monthly reports to the City Council detailing funds flowing into and out of city accounts. City administrators and finance managers help taxpayers’ taxes be accounted for correctly.

There is also an annual audit. Pennsylvania requires municipalities to file annual reports disclosing financial information such as revenues, expenses and cash balances, including petty cash. Apart from this, local governments can, and often do, hire private companies to conduct more detailed annual audits.

According to state records, the city of Dubois submitted on a regular basis These reports are submitted to the Pennsylvania Department of Community and Economic Development. DuBois also hired a third-party accounting firm to conduct an additional annual audit, and Spotlight PA accessed the documents through a public records request.

One of those reports, released in 2020, found that the city had mistakenly credited Dubois Area United Way’s account with “significant donations” made to the city ballpark the previous year. The auditor discovered that The error “was not detected by the city’s internal controls,” according to the audit.

The audit said the city corrected the error as soon as it was notified, but did not disclose how much money was lost. Spotlight PA has asked the city for that information, but has not received a response.

Additionally, at least 10 city audits over the past 12 years have found Dubois’ internal controls over financial reporting to be “significant weaknesses.” City treasurers “do not currently have the appropriate level of technical knowledge and experience with generally accepted accounting principles,” the audit noted.

The city of Dubois uses a so-called cash-based accounting system, and “until it’s deposited into an account, it’s not strictly city money,” said Greg Prim, president of the Pennsylvania City Management Association, who advocates ethical and professional management. speaks. in local government.

Cash-based accounting methods are less preferred as they may not reflect the actual balance at the time.

“Auditors are not there to find problems. They are observing and making discoveries,” Primm said. “That authority comes from those in Congress elected to see that audit report, understand that audit report, and take affirmative action to implement its recommendations and findings.”

Carol E. Rowland, CPA, partner of Trout CPA in Lancaster, echoed that sentiment. The city’s failure to take corrective action despite the audit highlighting potential problems, she said, signaled a “break with the city government.”

“This is an internal control issue for the city,” said Rowland, whose practice now includes fraud investigations and fraud risk management. “Internal control is the responsibility of city management.”

Prim said strong internal controls became even more important as there is no state agency to oversee local government operations.

That’s why his association is “evangelizing good professional management,” he told Spotlight PA.

During the recent primary election, city residents expressed a clear dissatisfaction with the way the DuBois administration was run.

It may be next month that the results will be certified, unofficial results It shows that three incumbent city council members, including the mayor, were well behind their challengers in votes.

Leading: writing candidates who run on the promise of “restoring integrity and trust.”

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https://www.spotlightpa.org/statecollege/2023/05/pa-dubois-herm-suplizio-toni-cherry-cash-city-hall/ Cash Delivery Following Arrest of Pennsylvania State Employee DuBois Spotlight PA State University

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