Tuesday, July 17, 2012

State Board of Accounts Report Shows Former Center Township CFO Paid $170,000 More Than He Earned Over 6-Year Period

A State Board of Accounts report uncovers some very suspect payments totaling more than $170,000 over a six-year period that were made to the former CFO of the Center Township Trustee's office under Carl Drummer, which were couched as payments for over-time, comp and paid-time off. According to the report, Alan Mizen's salary as the township's CFO ranged from $79,000 in 2005 to $92,000 through his last year in 2010. Mizen had been hired to work as the CFO in 2001 as a contracted employee earning $72,000 a year, but the excessive additional compensation didn't start until 2005. Mizen received on top of his regular salary for the period of 2005-10 the following additional pay totaling $170,909.16:
  • Compensable Time ($68,399.42)
  • Overtime ($95,875.84)
  • Paid Time Off ($6,633.90)
As many of you know, salaried management personnel don't receive overtime pay, which regular hourly workers are required to be paid under the Fair Labor Standards Act. The comp time Mizen took was a fringe benefit, which allowed him to take paid time off for each additional hour he worked per day at the rate equal to time and a half for each additional hour worked. Mizen accumulated about 900 comp hours, claiming as much as 36 hours during a two-week period. He cashed out 1,623 hours of comp time for a sweet $68,399.42 in additional pay. Mizen also claimed during the period in question 1,438 hours of overtime, which netted him over $95,000 in additional pay. The township's policy also allowed Mizen to accumulate up to 225 hours of paid time off as a fringe benefit based on his years of service. Mizen was allowed to sell back to the township up to 150 hours of paid time off at a conversion rate of one hour for every two hours of paid time off, which essentially allowed him to sell back to the township 75 hours at his regular rate of pay. The State Board of Accounts, however, found that Mizen was able to accumulate 146 more PTO hours than the policy allowed and then sold back that time, which benefited him an additional $6,633.90 Not bad, eh?

The SBOA analyzed the hours Mizen reported working over the period from 2005-10. Not surprisingly, it found that the number of days he reported working more than a regular work day increased from 44 days in 2005 to 107 days in 2010. In some cases, Mizen reported working as much as 22 hours in a single day. At the same time, the State Board of Accounts found that several items that fell within his responsibility were either not performed or were incomplete. For example, the report says he didn't complete accurate bank reconciliations, he didn't maintain a Court Cash Book of Receipts and Disbursements, and he had failed to disburse some court fees to the state, county and township as required by law. The report found there were no internal controls over Mizen's time sheets. He didn't sign them, and the Trustee didn't review, approve or sign them. Nobody was approving Mizen's overtime pay in advance as required by the township's policy. More importantly, the report found that Mizen was not paid in accordance with his contract or township policy.

The SBOA gave former Center Township Trustee Carl Drummer the opportunity to respond to the report. I found one comment in Drummer's letter particularly laughable. "Generally, I applaud the SBOA for working for working around the state to reduce the rampant nepotism and selfdealing that occurs in some local governments," Drummer wrote. But he then went on to complain that he thought the agency had a tendency to abuse its authority "by overzealous prosecution of matters." Drummer essentially pleaded ignorance to all of the report's finding, claiming that he didn't have access to any of the documents necessary to respond to them. Ironically, Drummer said he hired Mizen away from the SBOA to make sure that his office's finances were "handled by someone expert in SBOA rules and processes." Drummer then grew very defensive, worrying that he might be held strictly liable for potential errors that he . . . could not reasonably detect." He then worried about the report's impact on his reputation. "In the public's view, my reputation will be tarnished by the mere publication of this report." Apparently Drummer is oblivious to his poor reputation that he accumulated during his tenure as Center Township Trustee. He continued, "The SBOA's report belies these efforts and does a disservice to both myself and many others who worked tirelessly to provide a valuable  service to the public. Yeah, Drummer worked tirelessly to steer six-figure legal payments to his buddy Lacy Johnson for years so that he could call in a favor and get his good buddy to give him a high-paying job as a lobbyist despite his lack of education credentials that most job applicants are required to meet in order to work for Ice Miller.

WRTV is reporting that the Attorney General's Office and the Marion County Prosecutor's Office are reviewing the report's findings. I wouldn't hold my breath expecting anything to happen on the criminal front. This is Indiana, after all. The more you lie, cheat and steal in the name of public service, the more you get ahead.


Indy Pilot said...

Funny how Mizen was also able to run his own private CPA practice and file returns on behalf of organizations while working so many tiring hours at the Trustee's office. Isn't there a public corruption hotline with the feds now?

Bradley said...

"Generally, I applaud the SBOA for working for working around the state to reduce the rampant nepotism and selfdealing that occurs in some local governments," Drummer wrote. But he then went on to complain that he thought the agency had a tendency to abuse its authority "by overzealous prosecution of matters."

Drummer should be aware, then, that the SBOA cannot prosecute anyone in any way. They can audit and issue the report to detail their findings, but can only recommend for prosecution. The SBOA is one of the state's best agencies (able to avoid the worst of Daniels as much as possible even though he has cut nearly 100 auditor positions during his Reign of Error), but the agency can only do so much. I'm very glad they caught this massive amount of public corruption, and I'm glad Kara Kenney was on the case to bring the audit to light.

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