MOUNT CARMEL - A letter from an independent auditor says the borough's bookkeeping contained major errors in 40 of 42 months she checked.
Tina J. Raup, accountant with Spruce Run Tax and Accounting Service, of Millville, details in a recent letter to borough council nine categories of errors reportedly made by former borough Treasurer Megan Janolek, including "bogus expenses made just to make the balances match" and "reconciliation discrepancy account used many times due to poor bookkeeping skills."
Other errors include not entering checks into QuickBooks, double entries, "bogus deposits," interest duplicated and triplicated in QuickBooks, incorrect check numbers, deposits not entered and incorrect amounts on checks and deposits.
Auditor Courtney Solomon, of Herring, Roll and Solomon, of Sunbury, alerted borough council to the bookkeeping errors in July and said they were so extensive she could not complete the audit.
Council had removed treasurer duties from Janolek's workload in March upon her request. She continued to work as the Lower Anthracite Transit System director, but in mid-October, a few months after the accounting errors were discovered, she was terminated.
The borough paid Raup approximately $2,000 to reconcile the borough's 16 bank accounts. Several had to be reworked back to January 2011 "just to get the balances correct," she wrote.
Council President Tony Matulewicz said Janolek's errors nearly caused a budgeting disaster this year because the 2015 budget is based off of the expenses of previous years. When he input the correct amounts for the borough's expenses, the budget was significantly in the red.
"I looked at the new numbers and almost had a stroke," he said. "It appears we're without $82,000 because all the numbers were understated."
Fortunately, Matulewicz said, further investigation revealed the revenues were also erroneous. Fixing them balanced the budget.
He said he can't overstate "how much time and effort and anxiety went into her not doing her duty."
Matulewicz said he is most bothered by Janolek's seeming difference to the impact her errors could have had on the thousands of residents living in the borough.
At meetings, council members would often discuss expenses and ask if Janolek had any questions or comments when she gave the treasurer's reports. She never spoke up, even though she knew she was making mistakes, he said.
He said the borough had provided Janolek with training in QuickBooks as well as the bookkeeping software previously used.
Matulewicz said recently discovered the Mount Carmel Housing Department's budget, which is filed separately from the borough's, also contained errors. While a professional will need to repair the books, Matulewicz said he anticipated the cost to be low.
"We only write a few checks a month out of there," he said.
Ann Swartz took over the role as borough treasurer in August. So far, Matulewicz has been pleased with her work.
"She takes her job seriously," he said. "I'm comfortable with her there."
To prevent future errors from compounding the way they did under Janolek, Matulewicz said the borough will continue to bring Raup in at a cost of approximately $400 per quarter.
He said council had a discussion with Borough Manager Edward Cuff III regarding the oversight of Janolek's work.
Meanwhile, Cuff is working on more thoroughly understanding the treasurer's duties, Matulewicz said, and he's been working alongside Swartz as she becomes acclimated to the borough's books.
"They're both sitting down and putting things in," he said.
Janolek had tried to explain some of the mistakes when they were first discussed publicly earlier this year. She also noted that she had asked for help in early 2013, saying it was too much trying to handle both the LATS and treasurer duties.
A previous phone number for Janolek is no longer in service.