NEW CARLISLE — New Carlisle's financial problems stem from the erroneous addition of more than $500,000 to the city's books in order to reconcile bank statements.

Finance Director Debi Heiligenberg said during a meeting of City Council members Monday night that she increased the amount of money listed in the city's Star Ohio Bank account in December 2001 because bank statements showed the city had $571,848 more in that account than its own records indicated.

Heiligenberg said she didn't realize that the $571,000 also was showing up in the city’s National City Bank account, meaning the same sum was being recorded twice.

"Instead of increasing, I should have just transferred money. I made an error in the way I corrected Star Ohio on our books," Heiligenberg said.

She said she started her job as the finance director in November 2000 and the city's books were not balanced at the time.

She said she tried for 14 months to reconcile all the city's bank statements but was unable to do so. The city then hired Columbus auditing firm Steen & Kennedy to reconcile the city's accounts.

The city's Star Ohio account went from $810,000 in November 2000 to $6,747 in August because the city thought it had more money than it did.

City Manager James Caplinger said the balances being recorded in the computer system were not accurately showing what was in the account. As the city budgeted and spent money, council members got statements with wrong balances, he said.

"Because the system was not accurate, it was showing there was still ample money in the account, so the city continued to spend and do projects," Caplinger said.

A consultant reconciled inaccurate bank statements from January 2001 to June 2002.

Jared Cottrell, a Steen & Kennedy certified public accountant, told City Council members Monday that the city changed its accounting software system on July 1, 2001. It would be virtually impossible to reconcile the city's bank accounts before that time, he said.

"This information makes it very disappointing because I was hoping we could go back and find problems," Councilman Jeff McGlaun said.

Council members agreed to have Cottrell examine bank statements from the city's Star Ohio bank account to see all the transactions that were made into and out of the account.

Cottrell said the city's new software has adequate controls to prevent similar financial problems from occurring again.

Springfield News Sun

-- Anonymous, May 13, 2003