The Daily Globe - Serving Gogebic, Iron and Ontonagon Counties

Township board votes to sue former treasurer

 


By RICHARD JENKINS

rjenkins@yourdailyglobe.com

Ironwood Township — While most of the overflow crowd had already left the building due to the preceding closed session Thursday, the Ironwood Township Board ended its first meeting since the charges against her were announced by deciding to sue former township treasurer Jyl Olson-DeRosso.

Treasurer Maria Graser’s motion, which passed unanimously, cited “claims resulting from the ongoing investigation” into Olson-DeRosso’s alleged embezzlement while serving as treasurer as the basis for the litigation.

Olson-DeRosso, 47, is facing 10 felonies in connection with the embezzlement alleged to have occurred from 2011 to 2016, following her loss to Graser in November’s election.

Olson-DeRosso is charged with five counts of forgery, one count of embezzlement by a public official, refusing to turn over records to the successor treasurer, removal and destruction of public records, using public money for her own use and diversion of taxes or public money by a public official.

The most serious charges against her, the forgery charges, each carry a potential maximum sentence of 14 years in prison.

Olson-DeRosso is accused of issuing checks to herself and taking cash funds in the amount of $114,470 from the tax fund and $81,392 from the trust and agency fund — for a total amount of $196,862 in the five-year period between 2011 and 2016, according to Gogebic County Prosecutor Nick Jacobs.

While the ongoing investigation and criminal case limited what information the board could be released to the public, the members of the board of trustees attempted to provide what information they could to those in the audience who turned out seeking answers.

Among the new pieces of information provided was that while the total amount missing is still being calculated — and could wind up being more than the $196,862 cited by Jacobs — initial indications were the township would possibly have the final amount covered by its insurance.

“There is bonding insurance, and we actually filed a bonding claim quite awhile ago when we first became aware of potential issues,” supervisor Steve Boyd said in response to an audience question. “Some of it will be through just the township, some of it will be through other entities, and we are optimistic everything will be made whole.

“So far — and actually we’ve gotten good news the last couple of days — we’re hopeful we’ll be made whole.”

After the meeting, Boyd clarified the township is actively pursuing the possibility of recouping the funds through bonding insurance, but said that things remained extremely tentative and would depend on a number of factors, including some out of the township’s control.

During the meeting, he also said while the developing nature of the situation prevented him from speaking in absolutes, raising taxes to cover the missing funds wasn’t something he thought would be necessary.

“I have no intention of raising taxes, I’ll put it that way,” Boyd said. “At this point, that’s not something that would have to be done and that is certainly below the last of the things that I would want to do to resolve this.

“Numbers are still flying around, so it’s hard to get a pin on exactly what’s going to be covered — but right now it’s looking reasonably like we’ll be able to weather this.”

A number of residents in the audience questioned the board on how the alleged embezzlement wasn’t caught earlier and why checks and balances weren’t in place to prevent the issues.

“We know the person who may be guilty of the charges, but I think there may be some other who were let down. There should have been a check and balance (in place),” Sharon Hallberg said.

Boyd said the board has put in place over 20 new policies and practices in the past months to prevent future problems.

“The first thing I did when I came in was double signatures on all bank accounts,” Graser said, citing some of the steps taken. “(We started) double signatures on cash deposits, proof of checks going in and out of the office, (installing) a cash receipting program so we can balance at the end of the day. Our reports show exactly what came in and what came out. When we take in a payment, your payments are applied that day and it shows; if you paid with check, I have your check number, and if you paid with cash, it shows that.”

The flaws in the past practices were evident at several points during the meeting, including when at least two members of the audience claimed they had each had a check lost for as long as six months in the township offices.

“I’m not shocked,” Boyd responded.

Boyd also said that while no one grasped the full scope of the alleged crime, there had been several attempts to take action as early indications appeared but that roadblocks were thrown up.

“No one knew exactly the depth of what was going on, but we began to establish protocols to rein things in and that’s part of the reason why (charges being brought) happened when it did and not much later,” Boyd said. “Your criticisms are right on, these are things that should have been in place years ago. What I can tell you is, since Nov. 20 we’ve stopped the bleeding.”

Former township trustee Kathy Maki also pushed back against the idea that the previous board did nothing as early indications appeared, saying she felt the township office became something of “a good ol’ boys club” and claimed some who tried to speak up were bullied into silence.

In September, the Ironwood Township Board approved a contract with the Michigan Department of Treasury’s audit division to resolve discrepancies with the township’s 2015 audit.

Boyd said this agreement is what started the process that resulted in Monday’s charges.

“This is a direct result of the state investigation of the records that was initiated in September,” Boyd said. “As the state investi- gated what we asked them to, they also uncovered additional problems.”

The agreement was one of several attempts the board made to account for approximately $50,000 missing from the town- ship’s water and utilities funds.

At its July 25 meeting, the board approved requesting the state police open an investigation into the unaccounted for money. Then supervisor Alan Baron reported at the board’s Aug. 8 meeting the MSP request was put on hold. According to information presented at the meeting, the investigation was paused until the board and its auditing firm completed the 2015 audit and had some evidence of the possible commission of a crime.

While the expanded treasury investigation led to Monday’s charges, Boyd said the state is still working to resolve the discrepancies into the water and utilities funds that were the subject of the original request.

Several people on the board and in the audience said the role of a traditional auditor is primarily to reconcile the data presented, rather than investigate whether the numbers are true. In light of this limited role, the question of the township hiring a forensic auditor was brought up but Boyd said that was one of the things he couldn’t discuss at this time.

 
 

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