HomeMy WebLinkAbout1498 NeffIn Re: Lenna Neff,
Respondent
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Donald M. McCurdy
Paul M. Henry
Raquel K. Bergen
Nicholas A. Colafella
07 -074
Order No. 1498
12/4/08
12/19/08
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted
an investigation regarding possible violation(s) of the Public Official and Employee Ethics
Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq., by the above -named Respondent. At the
commencement of its investigation, the Investigative Division served upon Respondent
written notice of the specific allegation(s). Upon completion of its investigation, the
Investigative Division issued and served upon Respondent a Findings Report identified as
an "Investigative Complaint." An Answer was not filed. A Stipulation of Findings and a
Consent Agreement waiving an evidentiary hearing were submitted by the parties to the
Commission for consideration. The Stipulated Findings are set forth as the Findings in this
Order. The Consent Agreement has been approved.
This adjudication of the State Ethics Commission is issued under the Ethics Act and
will be made available as a public document thirty days after the mailing date noted above.
However, reconsideration may be requested. Any reconsideration request must be
received at this Commission within thirty days of the mailing date and must include a
detailed explanation of the reasons as to why reconsideration should be granted in
conformity with 51 Pa. Code § 21.29(b). A request for reconsideration will not affect the
finality of this adjudication but will defer its public release pending action on the request by
the Commission.
The files in this case will remain confidential in accordance with the Ethics Act.
Neff, 07 -074
Page 2
I. ALLEGATIONS:
That Lenna Neff, a (public official /public employee) in her capacity as
Secretary /Treasurer and Tax Collector of Port Matilda Borough, Centre County violated
[Sections 1103(a), 1104(a), and 1105(b)(5)] of the State Ethics Act (Act 93 of 1998) when
she used the authority of her public position for private pecuniary gain when she utilized
borough and Tax Collection funds for personal use; made purchases of a personal nature
using borough credit accounts at Office Depot and Wal -Mart; utilized borough equipment
and facilities in furtherance of personal Ebay and PayPal business transactions; when she
authorized and issued payments to her for expenses related to her position as the elected
borough tax collector; when as borough tax collector she used the authority of her position
to bill and charge her expenses as tax collector to Port Matilda Borough; and when she
failed to file Statements of Financial Interests for calendar years 2002 and 2003 and failed
to disclose all sources of income in excess of $1,300.00 on Statements of Financial
Interests for calendar years 2004, 2005, and 2006.
II. FINDINGS:
1. Lenna Neff served as the Secretary /Treasurer of Port Matilda Borough, Centre
County from approximately 1999 until resigning effective August 17, 2006.
a. Neff also has served as the elected Borough Tax Collector since at least
1999.
b. Neff's normal office hours as Secretary /Treasurer were Tuesday and
Thursday 10:00 a.m. to 5:00 p.m. and Wednesdays 10:00 a.m. to 7:00 p.m.
Additional days and hours were worked on an as needed basis.
2. As Secretary /Treasurer, Neff reported to Port Matilda Borough Council.
a. Port Matilda Borough Council consists of seven members and a mayor.
b. Neff handled the day -to -day operation of the Borough with minimal
supervision.
c. Neff had primary responsibility for all clerical, financial and administrative
aspects of the Borough's operation with minimal Council supervision.
d. Port Matilda Borough did not employ an Assistant Secretary /Treasurer
during Neff's tenure.
e. Council did not closely monitor Neff's daily activities as Secretary/Treasurer.
3. As Secretary /Treasurer, Neff's general job duties were established by her and
included in a job description on file with the Borough outlining the following defined
duties:
• Prepares agenda for council meetings by compiling correspondence, citizen
requests, bills to be paid, financial reports, proposed ordinances and resolutions.
Prepares background information on items for council members' review prior to the
meeting.
• Attends council meetings, provides procedural advice on the conduct of the meeting
and prepares the minutes by summarizing information on handwritten notes and
taped transcripts. Paid for time.
• Advises solicitor of upcoming meeting items that may require legal research,
drafting of legislative actions or other advance preparation.
Neff, 07 -074
Page 3
• Sees that legislative actions are properly enacted by typing, checking, researching,
advertising and recording the action as required by law.
• Assist citizens by informing them of [borough] rules and laws, explaining
procedures, hearing complaints and either resolving them or referring them to the
responsible official.
• Maintaining official ordinance book. Recording of ordinances and resolutions in the
ordinance book.
• Pays bills and other obligations upon approval of the council members, scheduling
payments to the borough's advantage by observing due dates, discount periods and
maturity dates of invested funds.
• Contacts state and federal legislators for the council members to explain local
problems and solicit their assistance.
• Researches such items as investment opportunities, insurance plans, [and]
retirement systems in order to advise council members on relative costs and
advantages of available plans.
• Receives revenue from tax collections, permit fees, state and federal allocations,
utility payments and fines. Records and deposits funds in proper accounts. Also
includes the payment of local, state and federal payroll taxes.
• Manages short term investment of unused funds to borough's best advantage while
making sure funds are available when required.
• Assists in preparation of annual budget by summarizing past expenditures,
estimating costs of future needs, computing expected revenues and recommending
tax rates necessary to meet budget requirements.
• Periodically reconciles checking accounts, balances bookkeeping records, and
assures that necessary vouchers, receipts, etc. are properly recorded and filed for
audit purposes.
• Purchases equipment and services assuring that major purchases are advertised,
bid upon, and awarded in accordance with the law.
• Prepares various reports required by state and federal government and by
insurance carriers.
• Maintains payroll and benefit records for all borough employees.
• Maintains other records in accordance with a retention schedule of items such as
advertising, bids, contracts, road repairs, official actions and incidents.
• Prepares requests and applications for various grants, loans, rebates and other
legal entitlements.
• Maintains all borough related maps.
• Advises planning commission and zoning hearing board by providing proper legal
citations, formats, and procedure, and advertising requirements for decisions.
Advises on decisions to be made based on past precedents and limitations of
current ordinances.
• Assists citizen with zoning related problems and requests by advising them of legal
requirements and assisting them in preparing applications for requested actions for
consideration by the zoning officer.
4. From 1999 until August 17, 2006, while Neff was performing the duties of Borough
Secretary /Treasurer, she simultaneously held the elected position of Port Matilda
Borough Tax Collector.
a. As Port Matilda Borough Tax Collector, Neff was responsible for the
collection of real estate and per capita taxes from Borough property owners
for the taxing bodies of Centre County, Port Matilda Borough and the Bald
Eagle Area School District.
b. Neff performed her duties as Tax Collector from the Borough Office in
conjunction with her position of Secretary /Treasurer.
Neff, 07 -074
Page 4
5. Procedures, since at least 2004, for the Tax Collector to follow are outlined in a one
page document as follows:
a. Preparation -At least a month before you begin, you will need to do the
following things:
• Open an interest free checking account. You will need to deposit
approximately fifty dollars ($50) of your own money (depending on the bank
requirements) into the account to open it. Make sure the account is interest
free as it is required by law. Also make sure the bank does not charge any
fees for dropping the balance below a certain amount.
• Order checks at your own expense.
• Order a deposit stamp at your own expense.
• Order a deposit book at your own expense.
• Buy any record keeping equipment you may need (notebooks, tax print out
binders, adding machine)
• Make sure you purchase or have access to a copier and fax machine.
• If you are working out of your home office, you must have posted hours
according to the law, a separate telephone line with an answering machine,
parking and liability insurance. This may be covered under your home
owner's policy but when you inform the insurance company that you are
using your home as a business, your insurance rates will increase to cover
the liability.
• Order window envelopes with your name and stamps on them. The cost for
this is approximately (as of June 2004) $210.85. You will need to pay for
this and then submit a bill to the school for reimbursement or wait till the end
of the year if it is for County taxes.
• Make sure you check with the Borough so that you are bonded. The
Borough has to pay for this coverage.
b. Spring Borough Per Capita and Borough and County Real Estate Tax Bills:
Sometime in February you will receive a call from the County Tax Office
telling you that your spring taxes and any supplements (bills for new houses
or residents that were added to the list too late last year) are ready to be
picked up. You will need to drive to Bellefonte during their office hours to
pick up the taxes.
When you bring the tax bills home, there will be three colors: White are the
originals that are mailed to the property owners /residents, Green are copies
for you to keep if you need them, Yellow are the bills you hand in to have the
taxes calculated. Do not lose these -guard them with your life!
If you have received lists from mortgage companies of properties they want
the tax bills for, you will need to pull these white bills out of the piles and
send them to the mortgage companies.
Then proceed to mail the white bills out to the property owners /residents.
This must be done as close to March 1 as possible.
6. As Borough Secretary /Treasurer, Neff was responsible for the collection of all fees
from Borough residents.
a. Neff collected fees for pavilion rentals, dog licenses, building /zoning
permits and record duplication.
b. Port Matilda Borough has three pavilions available for rental by its residents.
Neff, 07 -074
Page 5
c. Dog licenses are issued by Centre County but sold locally by the Borough.
d. Building /Zoning permits are handled at the Borough level.
e. Payments for these items were made to Neff in the form of both cash and
checks.
7 Neff was responsible for completing financial transactions for the borough.
a. The Borough maintained financial accounts at Omega Bank and PNC Bank.
b. A commercial loan account was maintained at PNC Bank.
c. Approximately six accounts were maintained at Omega Bank including
Payroll, Water Works, General Fund, CDBG and Highway Fund and
Savings.
d. Neff had signature authority on all Borough accounts as
Secretary /Treasurer.
e. Checks issued by the Borough required signatures of Neff as
Secretary /Treasurer and one Council Member.
8. In addition to the financial accounts listed above, Port Matilda Borough also had
credit accounts at Lowes, Office Depot and Wal -Mart.
a. Neff was the Borough official who had possession of the credit cards issued
for these accounts.
b. Payments of these bills were included with other monthly Borough bills
included on Treasurer's Reports.
c. These credit accounts were to be used for Borough purchases only.
9. Neff provided Council with a monthly Treasurer's Report which represented
Borough financial activity for the prior month.
a. Council was provided with the Treasurer's Report as part of their meeting
packets.
b. Meeting packets were provided to Council Members approximately five days
prior to their voting meeting.
c. Council was not provided with the supporting documentation used by Neff to
complete the monthly Treasurer's Reports.
1. Neff never provided Council with invoices or bills.
d. Neff prepared monthly Treasurer's Reports using a Borough computer.
10. Monthly Treasurer's Reports completed by Neff typically included an itemized listing
of account activities and balances on the Borough's General Fund, Highway Fund,
Water Works Fund, Payroll Account, CDBG Account, Savings Account, and
Certificate of Deposit accounts.
a. Borough Council relied on the Treasurer's Reports for information on the
Neff, 07 -074
Page 6
Borough's financial status.
1. No invoices, bills or other information regarding expenditures were
provided by Neff.
b. Neff was solely responsible for the completion and content of monthly
Treasurer's Reports in her official capacity as Secretary /Treasurer.
11. At all times relevant to this investigation, Neff had access to a Borough owned
computer and general office equipment and supplies.
a. Neff was the sole clerical employee at the Borough while serving as
Secretary /Treasurer.
b. The Borough Office and its contents are not open to the general public
during non business hours.
c. The Borough Office and its contents are secured during non business hours.
d. Neff also performed her duties as Tax Collector from the Borough Office.
12. Port Matilda Borough office equipment included a Dell Dimension 4300 computer
serial number B4KSWO1.
a. Neff had unlimited access to this computer in her official capacity as the
Borough's Secretary /Treasurer.
b. This computer was not available for use by the general public.
c. Neff only had access to it as result of her public positions with the Borough.
d. This computer has a Seagate Barracuda 7200.7, 40 gigabyte hard drive,
serial number 5JXJZPR9.
e. This computer previously had a Western Digital Caviar 20 gigabyte hard
drive which was replaced after it malfunctioned.
13. Neff regularly completed personal transactions via the Internet through eBay using
the Borough computer.
14. Between July 10, 2003, and July 30, 2006, Neff routinely utilized the Port Matilda
Borough computer in furtherance of her personal online eBay transactions.
a. Neff regularly bought, sold and bid on items on eBay using the Borough
computer and Internet connection.
1. Council was not aware that Neff was utilizing the Borough computer
in furtherance of her eBay auction business.
b. Neff also completed transactions using eBay's online payment system known
as PayPal.
15. Port Matilda Borough did not conduct official business on eBay or PayPal during
Neff's tenure as Secretary /Treasurer.
16. Neff conducted personal business on eBay under the username Ijn7891.
Email Address History
Email
Effective Date
End Date
IP Address
emtneff27@windstream.net
4/12/2007 12 :16:58 PM
Present
Ljn13(a,scasd.org
3/19/2007 2:58:11 PM
4/12/2007 12:16:58 PM
205.174.111.252
Ijneff7891(a,adelphia.net
6/13/2005 9:49:20 PM
3/19/2007 2:58:11 PM
205.174.111.252
lennaneff@aol.com
12/5/2003 3:51:54
6/13/2005 9:49:20 PM
69.162.30.45
portmatildaboro@aol.com
9/26/2002 1:21:58 PM
12/5/2003 3:51:54 PM
172.143.18.242
Neff, 07 -074
Page 7
a. Lenna Neff opened an account on September 26, 2002, under the User ID
Ijn7891.
b. This username was unique to Lenna Neff.
c. Neff utilized this username for all of her eBay activities.
d. A valid username /account is required to conduct business on eBay.
17. eBay requires an active email address to be able to buy or sell items on its site.
a. Neff's most recent email on file with eBay is emtneff27@windstream.net.
18. Business records of eBay, Inc. reflect the following email history for Neff:
19. Two of the five email addresses Neff used for her eBay activities had connections to
public entities: portmatildaboro@aol.com and Ijn13@scasd.orq.
a. Neff used portmatildaboro @aol.com from September 26, 2002, until
December 5, 2003, and Ijn1 @scasd from March 19, 2007, until April 12,
2007.
b. Port Matilda Borough did not have its own email system at the time.
c. The Ijn13@scasd.orq was a governmental email address within the State
College Area School District.
20. Between July 10, 2003, and July 30, 2006, Neff listed approximately 2108 items for
sale on eBay.
a. Items sold by Neff on eBay were obtained by her from sources including but
not limited to eBay auctions she won and personal purchases from
businesses including Blair, LTD. Commodities, Roamans, TJ Maxx, Sears,
Target, Wal -Mart, Lane Bryant, Fashion Bug, Bon -Ton, Kaufmans and Old
Navy.
b. Neff also was the successful bidder on items approximately 813 times.
c. Neff routinely used the Borough computer to track her personal eBay
activities, buying and selling items.
21. Forensic examination of the Borough's Dell Dimension 4300 computer and Western
Digital Hard Drive found approximately 487 web pages relating to Neff's eBay
activities which were downloaded by Neff and were stored in unallocated spaces of
the hard drives.
a. Unallocated spaces are portions of the hard drive that more recent activity
Neff, 07 -074
Page 8
b. The 487 pages of data did not constitute the total number of pages viewed
by Neff, just those which still remained on the hard drives.
c. The actual number of pages of data downloaded by Neff was in excess of
487 pages.
22. None of the eBay activity conducted by Neff related to her official duties as the
Secretary /Treasurer of Port Matilda Borough.
a. Port Matilda Borough did not transact business on eBay.
b. All recorded activity related to Neff's personal eBay business.
23. Between November 15, 2003, and July 30, 2006, information on approximately 136
items of the 2108 total listings Neff had on eBay during this time frame were found
in files on the Borough computer.
a. These 136 items resulted in sales totaling approximately $1,669.23 by Neff.
b. By year known sales totals were as follows:
2003: $156.55
2004: $739.82
2005: $591.89
2006: $180.97
$1,669.23
24. PayPal, Inc. is an online financial center.
a.
b.
c.
has not over written the data.
PayPal, Inc. is used by many eBay patrons as a way to transfer funds
electronically online to complete an eBay transaction in a timely manner.
PayPal, Inc. can be used for other online financial transactions.
PayPal, Inc. transactions are electronic and do not involve cash.
25. Port Matilda Borough did not transact any business through PayPal, Inc. during
Neff's tenure as Secretary /Treasurer.
a. The Borough did not accept PayPal as a form of payment for any services
provided.
26. Port Matilda Borough also did not accept PayPal, Inc. as a payment option for any
financial obligation due to the Borough through the collection of taxes from its
residents.
27. Neff used the Borough computer to access PayPal, eBay's online payment system a
minimum of sixty -five (65) times between January 15, 2004, and May 4, 2006.
a. Each time Neff would login, PayPal would record the IP address of the
computer Neff was using for the transaction.
b. None of this account activity related to Neff's official duties as Borough
Secretary /Treasurer or Tax Collector.
Neff, 07 -074
Page 9
28. IP addresses starting with the numbers 199.234.152 were found on the Borough
computer and on PayPal records.
a. This cross reference indicates that the Borough computer was used to
connect to PayPal.
b. The complete IP address has an additional three numbers after the 152.
c. These IP addresses were owned by Lazerlink Internet Services, State
College, PA.
d. Lazerlink provided Internet services to Port Matilda Borough.
e. These addresses were used by the Port Matilda Borough computer for
connection to the Internet.
f. The entire IP address is dynamically assigned when the Borough computer
connects to Lazerlink's server.
29. In addition to utilizing the Borough computers for conducting eBay transactions,
Neff also logged into PayPal using the Borough computer.
a. Each login was to an IP address beginning with 199.234.152.
b. Neff logged in using an email address of EMTNeff27@windstream.net.
c. None of this activity related to Neff's duties as Secretary /Treasurer or Tax
Collector.
d. Neff logged in or out of PayPal a minimum of sixty -five times between
January 15, 2004, and May 4, 2006.
30. Neff realized a private pecuniary gain of at least $1,669.23 as a result of using
Borough equipment to complete eBay sales transactions.
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS THAT NEFF USED
BOROUGH CREDIT ACCOUNTS FOR PERSONAL USE
31. The Borough maintains credit accounts at local retail outlets for the purchase of
supplies.
a. Credit accounts are maintained at Lowes, Wal -Mart and Office Depot.
b. Purchases were made from these businesses mainly for office related
supplies.
1. The Lowes account was used for other maintenance purposes.
c. Neff, as Secretary /Treasurer, was assigned control over the Wal -Mart and
Office Depot credit accounts.
d. Neff, as the sole office employee, was the only Borough employee
authorized to make purchases using these credit accounts.
32. Between 2003 and 2006, Neff utilized Borough credit accounts at Wal -Mart and
Office Depot to make purchases of a personal nature.
Neff, 07 -074
Page 10
a. Credit accounts at these businesses were intended for official Borough
business.
b. Neff had access to Borough credit accounts at these businesses through her
position as Borough Secretary /Treasurer.
c. At times Neff would reimburse the Borough for personal purchases she
made at Wal -Mart.
1. Neff did not reimburse the Borough for personal purchases made at
Office Depot.
33. Neff made purchases of a personal nature at Wal -Mart in conjunction with
purchases she made on behalf of the Borough since at least 2003.
a. Neff, as Secretary /Treasurer, would receive Wal -Mart invoices and would
review these invoices prior to payment and determine which purchases were
of a personal nature.
1. Neff was the only Borough official to review these invoices prior to
payment being issued by the Borough.
b. Neff would issue payments from her personal account to Wal -Mart in
payment of expenses she deemed to be personal when monthly account
statements were received by the Borough.
c. Neff's purchases of a personal nature on this account were done without
Council approval.
34. Wal -Mart maintains business records detailing payments credited to an account
and their source back to 2006.
a. These transactional records consist of purchase receipts, monthly account
statements and payments received.
b. Wal -Mart does not maintain records for transactions occurring prior to 2006.
35. Wal -Mart records for 2006 confirm payments received for some purchases made on
the Borough account with checks issued from the personal account of Lenna Neff.
36. Copies of payments posted to the Borough account at Wal -Mart during 2006 detail
the following payments and sources of those payments:
Date Check # Amount Account
02/23/06 5569 $69.81 PMB General Fund
03/22/06 5609 $30.45 PMB General Fund
04/26/06 5640 $62.48 PMB General Fund
04/20/06 11713 $54.61 Lenna Neff Persona
05/15/06 11762 $120.57 Lenna Neff Persona
06/02/06 11796 $101.05 Lenna Neff Persona
06/13/06 11811 $158.66 Lenna Neff Persona
07/19/06 11841 $100.00 Lenna Neff Persona
08/01/06 11860 $27.84 Lenna Neff Persona
08/01/06 11858 $100.00 Lenna Neff Persona
08/19/06 2363 $53.76 PMB Water Works
08/28/06 11892 $44.23 Lenna Neff Persona
Date
Invoice #
Item #
Item Description
Price
Ch #
01/27/03
374017084000
633474
Monopoly PSX
$9.99
4760
01/27/03
374017084000
323422
Playstation
$9.99
4760
01/27/03
374017084000
323422
Playstation
$9.99
4760
01/27/03
374017084000
323422
Playstation
$9.99
4760
01/27/03
374017084000
633439
Test Drive 5 PSX
$9.99
4760
01/27/03
374017084000
385921
1000 Best Win Games
$4.99
4760
01/27/03
374017084000
449647
Great VHS Hits
$6.99
4760
01/27/03
374017084000
449647
Great VHS Hits
$5.01
4760
02/19/03
374011002000
323422
Playstation
$9.99
4802
02/19/03
374011002000
323422
Playstation
$9.99
4802
02/19/03
374011002000
323422
Playstation
$9.99
4802
02/19/03
374011002000
323422
Playstation
$9.99
4802
03/05/03
374039690000
323422
Playstation
$9.99
4821
12/18/03
717J352
616960511502
150 Minute Airtime Card
$39.99
5012
12/18/03
374015305000
154072
CD Player W /Switch
$15.91
5010
08/03/04
374011326000
413677
Laptop Bag
$9.99
5177
11/17/04
374010805000
570296
100U Airtime, TRACF
$29.99
5265
06/23/05
4594
488408
512MB USB Drive
$44.51
5409
$257.28
Neff, 07 -074
Page 11
37. During 2006, Neff issued eight (8) checks totaling $706.96 from her personal
account to Wal -Mart in payment of personal purchases she made and charged to
the Borough account.
a. Neff was the only Borough official that routinely made personal purchases on
the Borough's Wal -Mart account.
38. Neff did not disclose to Council that she was routinely making purchases of a
personal nature using the Borough's credit account at Wal -Mart.
39. Neff made purchases of a personal nature using the Borough's credit account at
Office Depot.
a. Personal items purchased included video games, videotapes, calling card
airtime and computer equipment and accessories including a laptop
computer bag.
40. Neff did not reimburse the Borough for purchases of a personal nature made on the
Borough's Office Depot credit account.
a. Neff did not have authorization from Borough Council to make personal
purchases using the Office Depot credit account.
b. Between 2003 and August 17, 2006, Neff was the only Borough employee
authorized to use the Borough's Office Depot account for official Borough
purposes.
41. The following chart details purchases unrelated to any Borough use made on the
Borough's Office Depot account between January 2003 and June 2005:
a. Items purchased between January 27, 2003, and March 5, 2003, related to
video games.
Date
Item #
Item Description
Price
Ch #
Signed Ch
01/27/03
633474
Monopoly PSX
$9.99
4760
Neff, Mellott
01/27/03
323422
Playstation
$9.99
4760
Neff, Mellott
01/27/03
323422
Playstation
$9.99
4760
Neff, Mellott
01/27/03
323422
Playstation
$9.99
4760
Neff, Mellott
01/27/03
633439
Test Drive 5 PSX
$9.99
4760
Neff, Mellott
01/27/03
385921
1000 Best Win Games
$4.99
4760
Neff, Mellott
01/27/03
449647
Great VHS Hits
$6.99
4760
Neff, Mellott
01/27/03
449647
Great VHS Hits
$5.01
4760
Neff, Mellott
02/19/03
323422
Playstation
$9.99
4802
Neff, Mellott
02/19/03
323422
Playstation
$9.99
4802
Neff, Mellott
02/19/03
323422
Playstation
$9.99
4802
Neff, Mellott
02/19/03
323422
Playstation
$9.99
4802
Neff, Mellott
03/05/03
323422
Playstation
$9.99
4821
Neff, Mellott
12/18/03
616960511502
150 Minute Airtime Card
$39.99
5012
Neff, Mellott
12/18/03
154072
CD Player W /Switch
$15.91
5010
Neff, Mellott
08/03/04
413677
Laptop Bag
$9.99
5177
Neff, Mellott
11/17/04
570296
100U Airtime, TRACF
$29.99
5265
Neff, Mellott
06/23/05
488408
512MB USB Drive
$44.51
5409
Neff, Maney
$257.28
Neff, 07 -074
Page 12
b. The Borough had no use for video games or VHS videos.
c. The Borough did not own a laptop computer and had no use for the laptop
bag purchased on August 3, 2004.
d. The 512MD USB Drive was not located in the Borough Office.
42. Neff, in her capacity as Borough Secretary /Treasurer, was the only Borough
employee making purchases from Office Depot during the time period from January
2003 to August 17, 2006.
43. Neff, in her official capacity as Port Matilda Borough Secretary /Treasurer, signed
the front side of all Borough checks issued to cover personal purchases made by
her on the Borough's account at Office Depot as detailed in Finding No. 41.
a. These checks also included the signature of one Council Member.
44. Neff, in her official capacity as Port Matilda Borough Secretary /Treasurer, signed
the front side of eight General Fund checks issued to Office Depot which included
payment of personal purchases totaling $257.28 as follows:
45. Neff realized a private pecuniary gain of $257.28 when she charged items of a
personal nature on the Borough's account with Office Depot and then participated
in [authorizing] payments from Borough accounts.
THE FOLLOWING FINDINGS RELATE TO THE ALLEGATIONS THAT LENNA NEFF
USED FUNDS FROM BOROUGH ACCOUNTS FOR PERSONAL USE.
46. Neff, as Borough Secretary /Treasurer, had signature authority over all Borough
bank accounts including the following:
Neff, 07 -074
Page 13
a. General Fund
b. Water Works account
c. Wage and Savings account
47. Neff also had signature authority over the Tax Collection account, as the Borough
Tax Collector.
48. All of these accounts were maintained at Omega Bank.
49. Between July 2002 and December 2005, Neff converted funds from the Borough's
General, Water Works, Savings and Tax Collection accounts to her own personal
use.
a. Neff wrote checks from these accounts and cashed them at Omega Bank,
the Borough's primary financial institution.
50. Neff concealed her misappropriation of Borough funds from these accounts by
providing Council with inaccurate monthly Treasurer's Reports.
a. It was Neff's responsibility to generate monthly Treasurer Reports in her
official capacity as Secretary /Treasurer.
b. Neff was the only Borough official or employee responsible for generating
monthly Treasurer Reports.
c. Neff provided Council with inaccurate Treasurer's Reports to conceal her
personal use of Borough funds by providing false information on the
Treasurer Reports as to the payee on checks issued.
51. On July 12, 2002, Neff issued check number 413 in the amount of $200.00 from the
Borough tax collection account to herself.
a. Neff had signature authority over this account.
b. The check was made payable to Lenna Neff and was signed by Neff as an
authorized signatory.
c. Neff cashed this check and converted the funds to her personal use.
d. On July 12, 2002, the same day as she issued check no. 413, Neff made a
cash deposit of $200.00 into her personal account at Omega Bank.
52. Neff was able to conceal this misappropriation of funds from the Tax Collection
account since she did not report to Council transactions she made as Tax Collector.
53. Neff in her official capacity as Secretary /Treasurer converted funds from the
Borough's General Fund and Water Works accounts to her personal use.
a. Neff converted six General Fund checks totaling $5,885.94 to personal use.
b. Neff converted two Water Works account checks totaling $1,000.00 to
personal use.
54. Between October 8, 2003, and August 30, 2005, Neff cashed six checks totaling
$5,885.94 from the Borough's General Fund account.
Treasurer's Report
(As Prepared by Neff)
Bank Records
(Actual Payee)
Ch #
Payee
Amount
Date
Payee
Amount
Memo
4937
Void
$0.00
10/8/2003
Cash
$500.00
Petty Cash
5002
Terry Williams, Esq.
$1,500.00
1/14/2004
Cash
$1,500.00
Truck
5227
Omega Bank
$1,500.00
10/29/2004
Cash
$1,500.00
Elle's Dinner
5275
Highway Utility Co.
$1,207.75
1/14/2005
Cash
$1,207.75
Winter 2004 -2005
5428
Council Wages /Savings
$1,000.00
8/2/2005
Cash
$1,000.00
Council
Wages /Savings
5442
Office Depot
$178.19
8/30/2005
Lenna
J. Neff
$178.19
Nothing
$5,885.94
Neff, 07 -074
Page 14
a. On monthly Treasurer Reports she submitted to Council, Neff reported that
the checks were either voided or were made payable to persons /entities.
b. The checks were actually made payable to cash or to Lenna Neff.
c. Neff then cashed the checks but did not return any money to the Borough or
make deposits to any Borough accounts.
55. The following chart details the six General Fund checks Neff converted to personal
use, while reporting to Council on Treasurer Reports that the checks were either
voided or issued to another payee:
a. Neff in her official capacity as Secretary /Treasurer signed the front side of all
six General Fund checks.
1. Each check also contained the signature of Council Member Kimberly
Klingler.
56. General Fund check number 4937 dated October 8, 2003, was represented by Neff
on her monthly Treasurer Report submitted to Council as being voided.
a. Neff made check No. 4937 payable to cash in the amount of $500.00.
b. Neff cashed the check on October 8, 2003.
c. The back of the check was endorsed with the signature, Lenna J. Neff.
57. General Fund Check number 5002 was represented by Neff on her monthly
Treasurer Report as being issued to Terry Williams, Esq. in the amount of
$1,500.00 as his retainer as Borough Solicitor for 2004.
a. Solicitor Williams' retainer for 2004 was actually paid by Borough General
Fund check number 4993 in the amount of $1,500.00 issued on December
23, 2003.
b. Check no. 5002 was made payable to Cash in the amount of $1,500.00 by
Neff and cashed on January 14, 2004.
1. The back of check no. 5002 contained the signature, Lenna J. Neff.
c. Neff deposited $1,500.00 in cash into her personal account at Omega Bank
on January 15, 2004, one day after check no. 5002 was cashed.
Neff, 07 -074
Page 15
58. General Fund check number 5227 dated October 29, 2004, was reported by Neff on
her monthly Treasurer Report to Council as being made payable in the amount of
$1,500.00 to Omega Bank.
a. Neff actually made the check payable to Cash.
b. This check was cashed by Neff on October 29, 2004.
1. The back of the check contained the signature, Lenna J. Neff.
c. On that same day, Neff deposited $1,000.00 cash into her personal account
at Omega Bank.
59. General Fund check number 5275 dated January 14, 2005, was listed by Neff on
her monthly Treasurer Report to Council as being issued in the amount of
$1,207.75 to Highway Utility Company.
a. Neff made the check payable to Cash, not to Highway Utility Company.
1. Neff was one of the two authorized Borough signatures on the check.
b. This check was cashed by Neff on January 14, 2005.
1. The back of the check contains the signature, Lenna J. Neff.
60. Highway Utility Company is not a registered business with the Pennsylvania
Department of State, Corporation Bureau.
a. Highway Utility Company does not have any business information online or a
company web site.
b. Port Matilda Borough has not had any recorded business dealings with an
entity by the name Highway Utility Company.
61. Highway Utility Company was a business name created by Neff to conceal her
misappropriation of Borough General Fund check number 5275 in the amount of
$1,207.75 which she endorsed and cashed on January 14, 2005.
62. General Fund check number 5428 dated August 2, 2005, was represented by Neff
on her monthly Treasurer Report submitted to Council as being made payable to
the Borough Council Wages (Savings) account in the amount of $1,000.00.
a. The check was actually made payable to cash.
1. Neff was one of the two authorized Borough signatures on the check.
2. Neff prepared the check with the payee to Cash.
b. This check was cashed by Neff on August 2, 2005.
1. The back of the check contains the signature, Lenna J. Neff.
63. General Fund check number 5442 dated August 30, 2005, was represented by Neff
on her Monthly Treasurer Report submitted to Council as being made payable to
Office Depot in the amount of $178.19.
Neff, 07 -074
Page 16
a. This check was actually made payable to Lenna J. Neff and cashed by her
on August 30, 2005.
1. The back of the check was endorsed with the signature Lenna J. Neff.
b. No receipts from Office Depot in the amount of $178.19 are on file with Port
Matilda Borough.
c. Neff as Secretary /Treasurer was the custodian of those records at that time.
64. On April 18, 2005, Neff issued check no. 2224 from the Water Works account in the
amount of $1,207.75 payable to the General Account, Port Matilda Borough.
a. The memo portion of the check reflects reimbursement of water meters.
1. Neff signed check no. 2224 as an authorized Borough [signatory].
2. Neff prepared check no. 2224 in her official capacity.
b. Neff reported to Council on her monthly Treasurer Report that the payment
was a reimbursement from the Water account for the purchase of water
meters made from the Borough General Fund by check no. 5275. (Finding
#59)
c. Check no. 5275 was actually made payable to Cash and cashed by Neff.
d. Neff's false representation to Council was made to conceal the fact that she
cashed check number 5275 and converted those funds to her personal use.
e. By issuing check no. 2224 from the Water Works account, Neff reimbursed
the General Fund for the amount of $1,207.75 that Neff had previously
converted for her personal use when she cashed check number 5275.
65. Port Matilda Borough purchased water meters from National Road Utility, Natrona
Heights, PA on or about December 20, 2004.
a. National Road Utility Supply Inc. invoice number 83502 dated December29,
2004 in the amount of $1,005.08 was issued to Port Matilda Borough for the
purchase of sixteen Badger Touch Meters.
b. This invoice was paid by Water Works Fund check number 2197 issued by
Neff and debited from the account on February 7, 2005.
c. No Port Matilda Borough General Fund monies were used for the purchase
of water meters.
d. These were the only water meters purchased during this time period.
66. Neff converted funds from the Water Works account to her personal use between
April and October 2003.
a. Neff issued Water Works check no.'s 2051 and 2081 to her on April 24,
2003 and October 18, 2003, respectively.
67. Neff represented to Council on monthly Treasurer Reports that Water Works fund
check numbers 2051 and 2081 were voided.
Neff, 07 -074
Page 17
a. Neff made these misrepresentations to conceal the fact that she cashed
these checks converting the funds to her own personal use.
b. [Each of these checks was] in the amount of $500.00 and cashed by Neff at
Omega Bank.
68. Water Works account check number 2051 in the amount of $500.00 was made
payable to Omega Bank and cashed by Neff on April 24, 2003.
a. Neff signed check no. 2051 as one of two Borough authorized signatories.
1. Neff prepared the check in her official capacity.
b. Neff signed the back of check no. 2051, Lenna J. Neff.
c. Neff deposited $200.00 cash into her personal account at Omega Bank on
April 24, 2003, the same day that she cashed no. 2051.
d. Neff prepared and submitted a Treasurer Report to Council asserting that
check no. 2051 was voided.
1. Neff's actions concealed that she had used Water account funds for
her personal use.
69. Water Works account check number 2081 dated October 7, 2003, in the amount of
$500.00 made payable to Cash was prepared by Neff who also signed the check as
one of two authorized signatories.
a. The memo portion of the check indicated petty cash.
b. The back of the check was signed, Lenna J. Neff.
c. The check was cashed on October 8, 2003.
d. Neff submitted a Treasurer Report to Council alleging that the check was
voided in order to conceal that she converted the funds from this check for
her personal use.
70. Neff prepared Water Works account check no. 2177 payable to Cash in the amount
of $200.00.
a. The memo portion of the check indicates topsoil.
b. Neff signed the front of check no. 2177 as one of two authorized signatories.
c. The back of check no. 2177 contains the signature, Lenna J. Neff.
d. The check was cashed by Neff at Omega Bank on October 7, 2004.
e. No receipts for the purchase of topsoil around October of 2004 in the amount
of $200.00 are on file with Port Matilda Borough.
71. Neff submitted to Council a Treasurer's Report that Water Works Fund check
number 2177 was made payable to Omega Bank in the amount of $200.00 with a
notation of "topsoil."
a. Neff's submission [was] to conceal her conversion of check no. 2177 for her
Neff, 07 -074
Page 18
personal use.
72. On November 4, 2003, Neff issued Borough General Fund check number 4952 in
the amount of $2,800 payable to cash.
a. Check no. 4952 is signed by Neff and Council President, Kim Klinger.
b. The check was cashed on November 7, 2003.
c. The memo portion of the check reflects building repairs 2003/2004.
d. The check was endorsed, Lenna J. Neff on the back.
e. On that same day (November 7, 2003), Neff deposited $500.00 into each of
the Borough's General and Water Works accounts.
f. No records exist of any building repairs for 2003/2004.
73. Borough financial records reflect cash deposits to the Borough accounts on
November 7, 2003, as follows. The deposit slip for each transaction states the
following reason for the reimbursements.
a. Date Amount Reason
11/07/03 $500.00 Reimbursement Check # 4937 (General Fund Account)
11/07/03 $500.00 Reimbursement Check # 2081 (Water Works Account)
b. Check no. 2081 was a Water Works account check Neff issued on October
7, 2003, payable to Cash in the amount of $500.00. (Finding #69)
c. Check no. 4937 was a General Fund check issued on October 8, 2003,
payable to Cash in the amount of $500.00. (Finding #56)
74. On November 12, 2003, five days after cashing check no. 4952, Neff deposited
$1,650.00 cash into her personal account at Omega Bank.
a. This was the balance remaining of check no. 4952, after Neff made the two
$500.00 deposits to the General Fund and Water Works accounts.
75. Port Matilda Borough had a General Fund Savings account also under the control
of Lenna Neff in her official capacity as Secretary /Treasurer.
a. The basis for this account was to have a source of funds for events such as
Borough picnics, recognition dinners and memorial contributions.
b. This account was funded solely by the compensation received by Borough
Council Members and the receipt of fees from the sale of dog licenses.
1. Council members donated their compensation, as elected officials, to
this account.
c. This account was commonly known as the Council wages /savings account.
76. Neff provided Council with activity reports on this account as part of her monthly
Treasurer Reports.
a. These activity reports outlined account activity including deposits and
expenses incurred.
Treasurer's Report
Prepared by Neff
Bank Records
Month/
Year
Source
Withdrawal
Deposit
Date
Activity
Deposit
Withdrawal
Feb -02
Cookies
$10.00
No Records
Mar -02
Boro Dinner
$80.00
No Records
Rileighs
$580.00
Dog Licenses
$25.00
Apr -02
Dog Licenses
$35.00
No Records
Interest
$8.32
May -02
Terry's Gift
$50.00
6/3/02
Cash Withdrawal
$50.00
Parade Candy
$100.00
6/17/02
Cash Withdrawal
$100.00
Dog Licenses
$27.00
6/5/02
Cash Deposit
$27.00
Dog Licenses
$21.00
6/5/02
Cash Deposit
$21.00
Council Wages
$1,500.00
6/17/02
General Fund#
4602
$1,500.00
5/1/02
Interest Credited
$2.49
Jun -02
Picnic
$66.11
7/1/02
Cash Withdrawal
$66.11
E Dinner /Parade
$171.47
Dog Licenses
$20.00
7/2/02
Cash Deposit
$20.00
Remain From
Candy
$30.93
Interest
$7.91
6/28/02
Interest Credited
$7.91
7/9/02
Cash Withdrawal
$400.00
7/12/02
Cash Deposit
$228.53
Jul -02
No Activity
Aug -02
No Activity
August No Activity
Sep -02
Deposit
$721.89
9/30/02
Interest Credited
$11.14
Neff, 07 -074
Page 19
b. Neff was the sole custodian of this account as Secretary /Treasurer.
c. Neff did not provide Council with the copies of monthly account statements
received from Omega Bank detailing actual account activity.
d. Council did not closely monitor activity in the Council wages /savings
account.
77. Neff utilized funds from the Borough's General Fund Savings Account commonly
known as the Council Wages /Savings account for her personal use.
a. Neff would make cash withdrawals from this account and submit altered
and /or inaccurate receipts to conceal her misappropriation of funds.
b. Neff also made cash withdrawals from this account without any supporting
expense receipts.
c. Neff was able to conceal this activity from Council by providing inaccurate
monthly Treasurer Reports to them.
78. The following chart details account activity reported on monthly Treasurer Reports
Neff provided to Council compared to the actual account activity as reported on
Omega Bank records:
Oct -02
No Activity
October No Activity
Nov -02
No Activity
November No
Activity
Dec -02
None Listed
12/4/02
Cash Withdrawal
$50.00
12/13/02
Cash Withdrawal
$800.00
12/23/02
Cash Withdrawal
$375.00
12/31/02
Interest Credited
$9.44
Jan -03
No Activity
1/10/03
Cash Withdrawal
$800.00
1/16/03
Cash Deposit
$146.24
Feb -03
None Listed
2/5/03
Cash Deposit
$83.00
Mar -03
Dog Licenses
$48.00
3/6/03
Cash Deposit
$48.00
Dog Licenses
$28.00
4/3/03
Cash Deposit
$28.00
Interest
$13.86
3/31/03
Interest Credited
$4.42
Apr -03
Dog Licenses
$34.00
5/7/03
Cash Deposit
$34.00
May -03
Flowers
$34.00
5/28/03
Account Transfer
$34.00
Memorial
$35.00
Gift
$54.73
Memorial
$75.00
Cookies
$60.00
Boro Picnic
$137.74
6/13/03
Cash Withdrawal
$137.74
Dog Licenses
$7.00
5/28/03
Cash Deposit
$7.00
5/28/03
Miscellaneous
Debit
$224.73
Jun -03
Parade Candy
$93.14
7/7/03
Miscellaneous
Debit
$93.14
Dog Licenses
$10.00
7/7/03
Cash Deposit
$10.00
Dog Licenses
$9.00
Jul -03
Interest
$4.26
6/30/03
Interest Credited
$4.26
Aug -03
Dog Licenses
$9.00
9/17/03
Cash Deposit
$9.00
August No Activity
Sep -03
None Listed
9/17/03
Cash Withdrawal
$40.00
9/30/03
Interest Credited
$2.65
9/17/03
Cash Deposit
$8.00
Oct -03
Council Wages
$750.00
11/3/03
General Fund#
4949
$750.00
October No Activity
Nov -03
Cookies
$60.00
11/5/03
Miscellaneous
Debit
$60.00
Ellie's Dinner
$150.00
11/5/03
Cash Withdrawal
$150.00
Budget Dinner
$30.00
11/5/03
Miscellaneous
Debit
$30.00
Leftover Ellie's
Dinner
$30.00
11/5/03
Cash Deposit
$30.00
Dec -03
Holiday Dinner
$1,000.00
12/12/03
Cash Withdrawal
$1,000.00
Deposit Holiday
Dinner
$221.60
3/9/04
Cash Deposit
$221.60
12/31/03
Interest Credited
$2.86
Jan -04
Dog Licenses
$47.00
1/26/04
Cash Deposit
$47.00
Feb -04
No Activity
February No
Activity
Mar -04
No Activity
3/2/04
Cash Deposit
$72.00
3/29/04
Miscellaneous
Debit
$50.00
Neff, 07 -074
Page 20
Neff, 07 -074
Page 21
3/31/04
Interest Credited
$1.88
Apr -04
Dog Licenses
$52.00
4/1/04
Cash Deposit
$52.00
Dog Licenses
$31.00
5/13/04
Cash Deposit
$31.00
4/1/04
Cash Deposit
$72.00
May -04
Seminar
$40.00
6/9/04
Miscellaneous
Debit
$40.00
5/13/04
Cash Deposit
$52.00
Jun -04
Picnic
$117.33
`'
7/7/04
Miscellaneous
Debit
$117.33
Dog Licenses
$10.00
Interest
$2.34
6/30/04
Interest Credited
$2.34
6/9/04
Cash Withdrawal
$124.00
Jul -04
No Activity
Aug -04
Fire Company
Plaque
$25.00
8/20/04
Miscellaneous
Debit
$25.00
Cookies
$120.00
9/20/04
Miscellaneous
Debit
$120.00
Ellie's Dinner
$139.20
8/2/04
Miscellaneous
Debit
$139.20
Dog Licenses
$9.00
8/2/04
Cash Deposit
$9.00
Council Wages
$1,500.00
9/1/04
Transfer From
General Fund
$1,500.00
Sep -04
Seeger Memorial
$30.00
9/30/04
Miscellaneous
Debit
$30.00
Boro Dinner
$77.00
10/7/04
Miscellaneous
Debit
$77.00
Interest
$1.88
9/30/04
Interest Credited
$1.88
Lenna's Dinner
$11.00
Dog Licenses
$11.00
Oct -04
Lenna's Dinner
$11.00
Budget Dinner
$100.00
10/13/04
Cash Withdrawal
$100.00
Deposit Budget
Dinner
$57.56
1/26/05
Cash Deposit
$57.56
Nov -04
No Activity
November No
Activity
Dec -04
Holiday Party
$800.00
12/20/04
Miscellaneous
Debit
$800.00
Dog Licenses
$8.00
12/15/04
Cash Deposit
$8.00
Deposit Holiday
Party
$590.76
12/24/04
Cash Deposit
$590.76
12/15/04
Miscellaneous
Debit
$1,000.00
12/15/04
Cash Deposit
$10.00
Jan -05
Holiday
Decorations
$184.46
Interest
$2.67
12/31/04
Interest Credited
$2.67
Feb -05
Error from last
report
$184.46
12/24/04
Miscellaneous
Debit
$184.46
Mar -05
Holiday
$800.00
Deposit Holiday
$590.76
Dog Licenses
$11.00
3/7/08
Cash Deposit
$11.00
Interest
$1.18
3/31/05
Interest Credited
$1.18
Dog Licenses
$66.00
3/7/05
Cash Deposit
$66.00
Dog Licenses
$63.00
3/8/05
Cash Deposit
$63.00
Apr -05
None Listed
4/18/05
Cash Deposit
$46.00
4/18/05
Miscellaneous
$110.00
Neff, 07 -074
Page 21
Neff, 07 -074
Page 22
Debit
May -05
On Hold
May No Activity
Jun -05
On Hold
6/30/05
Interest Credited
$1.28
Jul -05
On Hold
7/5/05
Miscellaneous
Debit
$800.00
7/14/05
Cash Deposit
$7.00
7/14/05
Cash Deposit
$12.00
7/14/05
Cash Deposit
$46.00
7/18/05
Cash Deposit
$251.37
Aug -05
Jan Transfer for
meters
$1,000.00
8/5/05
Cash Deposit
$22.00
Lowes, Weis
$181.79
Deposit
reimbursement
$57.56
February No
Activity
March Dog
Licenses
$11.00
Dog Licenses
$66.00
Dog Licenses
$63.00
Interest
$1.18
April Dog
Licenses
$46.00
Boro Association
Dinner
$110.00
May No Activity
June Interest
$1.28
July Summer
Dinner
$800.00
Deposit Summer
Dinner
$251.37
Dog Licenses
$46.00
Dog Licenses
$12.00
Dog Licenses
$7.00
August Deposit
$22.00
Sep -05
None Listed
9/30/05
Interest Credited
$0.60
Oct -05
Budget Meeting
$28.00
10/26/05
Miscellaneous
Debit
$28.00
Dog Licenses
$6.00
11/15/05
Cash Deposit
$6.00
Dog Licenses
$4.00
11/8/05
Cash Deposit
$4.00
Remain Summer
Dinner
$510.00
11/16/05
Cash Deposit
$510.00
Interest
$0.60
Nov -05
Boro Association
Dinner
$766.50
Annual Mtg
Reimburse
$120.00
Transferred to
General
$70.13
Account Closed
Dec -08
No Report
12/30/05
Interest Credited
$0.53
12/1/05
Miscellaneous
Debit
$950.00
12/30/05
Service Charge
$3.00
Jan -08
No Report
1/11/06
Account Closed
$4.16
Neff, 07 -074
Page 22
Withdrawal
Date
Withdrawal Type
from Wage Account
Amount
Deposit Date to Neff
Personal Account
Amount
07/09/02
Cash withdrawal
$400.00
07/09/02
$80.00
Cash withdrawal
$375.00
01/10/03
07/09/02
$60.00
01/16/03
Cash deposit
$146.24
07/09/02
$210.00
12/13/02
Cash withdrawal
$800.00
12/13/02
$500.00
12/12/03
Cash withdrawal
$1,000.00
12/17/03
$200.00
12/18/03
$200.00
10/13/04
Cash withdrawal
$100.00
10/13/04
$100.00
12/15/04
Miscellaneous debit
$1,000.00
12/16/04
$515.00
07/05/05
Miscellaneous debit
$800.00
07/11/05
$340.00
12/01/05
Miscellaneous debit
$950.00
12/05/05
$38.00
12/12/05
$145.00
Total
$5,050.00
$2,388.00
Date
Activity
Amount
12/04/02
Cash withdrawal
$50.00
12/13/02
Cash withdrawal
$800.00
12/23/02
Cash withdrawal
$375.00
01/10/03
Cash withdrawal
$800.00
01/16/03
Cash deposit
$146.24
02/05/03
Cash deposit
$83.00
Neff, 07 -074
Page 23
79. Neff made cash withdrawals from the Council Wages /Savings account to pay for
expenses, including but not limited to, Borough holiday parties and budget and
recognition dinners.
a. Council held holiday parties in 2003 and 2004.
b. Budget and recognition dinners were held in 2003, 2004, and 2005.
80. Neff made cash deposits into her personal account at Omega Bank at least eleven
(11) times in close proximity to making withdrawals from the Council Wages and
Savings account. The following chart details these cash withdrawals and
subsequent deposits to Neff's personal account:
81. Of the $2,388.00 cash deposits into Neff's personal account at Omega Bank
detailed in the previous finding, $1,465.00 was deposited either the same day or the
following day of a cash withdrawal from the Borough Savings account.
a. $950.00 cash was deposited by Neff into her personal account the same day
as the cash withdrawal from the Borough Savings account.
82. Between December 2002 and February 2003 Neff made four (4) cash withdrawals
from and two (2) cash deposits into the Wages and Savings account.
a. These cash withdrawals and deposits occurred as follows:
b. Treasurer Reports submitted to Council by Neff covering the period October
2002 through February 2003 include no recorded activity.
83. On December 13, 2002, Neff withdrew $800.00 cash from the Council
Wages /Savings account.
a. No receipts are on file to support the $800.00 cash Neff withdrew from this
account on December 13, 2002.
Neff, 07 -074
Page 24
b. On that same day (December 13, 2002), Neff deposited $500.00 cash into
her personal account at Omega Bank.
c. Neff's Treasurer's Report for December 2002 does not list the withdrawal.
84. Neff made an $800.00 cash withdrawal on January 10, 2003, from the Wage and
Savings account for Council's holiday dinner for 2002 which was held in January
2003.
a. Receipts totaling $653.76 from the event are on file with the Borough.
b. Neff deposited $146.24 cash back into the account on January 16, 2003.
c. These receipts combined with the $146.23 cash Neff deposited on January
16, 2003, account for the $800.00 cash withdrawal on January 10, 2003.
85. On June 9, 2004, Neff withdrew $124.00 cash from the Council Wages Savings
account.
a. Borough records include no receipts to support this withdrawal.
b. This withdrawal is not accounted for on monthly Treasurer's Reports.
86. On December 15, 2004, Neff withdrew $1,000.00 cash from the Council
Wages /Savings account.
a. Neff informed Council that the money was going to be applied to the
purchase of water meters.
b. No water meters were purchased with these funds.
c. No other receipts are on file with the Borough to support this withdrawal.
87. Neff deposited $515.00 cash into her personal account at Omega Bank on
December 16, 2004.
a. This deposit occurred one day after Neff withdrew $1,000.00 from the
Council Wages /Savings account with no supporting receipts.
88. The actual purchase of water meters was from National Road Utility Supply, Inc. in
the amount of $1,005.08 on December 20, 2004.
a. These were paid for by Water Works fund check number 2197 issued on or
about January 17, 2004.
89. Neff made cash withdrawals totaling $1,924.00 from the Council Wages /Savings
Account which are not supported by any receipts. These cash withdrawals as
detailed in the previous findings occurred as follows:
a. Date Amount
December 13, 2002 $ 800.00
June 9, 2004 $ 124.00
December 15, 2004 $1,000.00
$1,924.00
90. Neff used the authority of her public position as Tax Collector and Borough
Neff, 07 -074
Page 25
Secretary /Treasurer between July 2002 and December 2005 to convert Borough /tax
funds to her personal use which resulted in the following private pecuniary gain:
a. Borough tax collection account: $ 200.00
(Finding Nos. 66 to 78)
b. General fund:
(Finding Nos. 66 to 78)
$ 5,885.94
$ 1,200.00
$ 1,650.00
c. Water Works account:
(Finding Nos. 79 to 84)
d. General fund (check no. 4952)
(Finding Nos. 85 to 87)
e. Wage and Savings account $ 1,924.00
(Finding Nos. 88 to 102)
$10,859.94
THE FOLLOWING FINDINGS RELATE TO THE ALLEGATION OF NEFF BILLING
TAX COLLECTOR EXPENSES TO THE BOROUGH
91. Neff, in her official capacity as Tax Collector for Port Matilda Borough, was
responsible for ordering prepaid envelopes to mail tax bills to Borough property
owners or their designees.
a. Neff was responsible for sending out two tax bills per property, per year.
b. In the late winter /early spring, tax bills for county and Borough Taxes are
mailed out.
c. In the early part of summer, tax bills for school district taxes are mailed out.
92. Neff, as Borough Tax Collector, routinely purchased pre - printed envelopes for
mailing both sets of tax bills from the United States Postal Services (USPS),
Personalized Envelope Program, PO Box 7247, Philadelphia, PA 19101 -7103.
a. Neff would telephonically place orders to the USPS Personalized Envelope
Program for tax notice envelopes.
b. Envelopes would be shipped by USPS to Neff, as Tax Collector, at P.O. Box
534, Port Matilda, PA.
c. Neff was responsible for making payment to USPS.
93. The cost of these pre -paid envelopes was to be initially paid by Neff with
reimbursement being made to her by the taxing body.
a. Past practice for envelope purchases was for the Tax Collector to purchase
envelopes from Tax Collector funds and then be reimbursed by the taxing
body.
1. The Borough would reimburse for Borough tax notices sent in the
spring of each year.
2. The BEASD would reimburse for real estate tax notices sent annually
each summer.
Neff, 07 -074
Page 26
94. On two occasions between June 2004 and May 2005, Neff utilized Borough funds to
pay for BEASD tax notice envelopes purchased from USPS.
a. Neff received payment from the BEASD for the two envelope purchases but
did not make any reimbursement to the Borough.
95. On January 4, 2005, Neff submitted a request for envelope reimbursement to the
Bald Eagle Area School District in the amount of $210.85.
a. Neff sent correspondence to the BEASD seeking reimbursement for the
purchase of envelopes for school district tax bills mailed in July 2004.
96. Attached to Neff's January 4, 2005, letter to the BEASD was a reorder form from the
USPS.
a. Neff submitted this form as justification for seeking the reimbursement
payment.
1. The BEASD would not have issued a reimbursement check to Neff
without a receipt or invoice confirming the expense.
b. The reorder form submitted by Neff included the following information:
Date: 11/11/03
Acct. No. 94458548
Items Purchased: Ribbon Star Win #10
Quantity: 500
Amount: $205.00
Total Order Amount: $210.85
Your Payment: $210.85
c. The invoice contained a stamp with the following:
PAID
Jun 01 2004
By: ✓ #5118
d. The stamp was identical to a stamp used by Neff as Port Matilda Borough
Secretary /Treasurer to indicate bills paid and check number.
1. The stamp indicated that the bill was paid on June 1, 2004, by
Borough check no. 5118.
e. Borough check no. 5118 was issued to the USPS Stamp Fulfillment Services
Personalized Envelope Program in the amount of $210.85.
1. The check was dated June 1, 2004, and cashed June 8, 2004.
2. The check was signed by Neff and Council President, Kim Klinger.
3. Neff's Treasurer's Report for June 2004 reflects a payment to Stamp
Fulfillment Services in the amount of $210.85.
97. Borough check no. 5118 was issued to the USPS Stamp Fulfillment Program on
June 1, 2004, approximately seven months after the November 11, 2003, USPS
invoice.
a. The reorder form indicated that the payment of $210.85 was made prior to
Neff, 07 -074
Page 27
November 11, 2003, making it impossible that check no. 5118 was used to
pay the November 11, 2003 invoice.
98. The BEASD issued check number 19744 in the amount of $210.85 to Neff on July
7, 2005, as reimbursement for Neff's January 4, 2005, request.
a. The reverse side of the check is signed by Lenna J. Neff and was cashed.
b. Neff did not provide any reimbursement to the Borough for the envelope
purchase.
99. In or about December 2005, Neff submitted a handwritten note to the BEASD
seeking reimbursement of expenses for pre - printed tax notice envelopes.
a. The note stated, "Please reimburse for envelopes ordered for the July school
tax mailing. "...
b. The note was signed Lenna.
100. Attached to the note was a USPS Stamp Fulfillment Services reorder form and an
Omega Bank Monthly Statement as confirmation of the expense incurred and
payment.
a. The reorder form contained six items but only a charge for the following:
1. Item no. 2142 — Ribbon Star Win #10- Quantity 500 - $205.00,
shipping $5.85, total $210.85.
2. The form was stamped received by the BEASD Business Office on
December 6, 2005.
3. The reorder form also contained a stamp with the following:
PAID
May 18, 2005
By: ✓ #5375
b. The Omega Bank Statement was for the time period May 1, 2005, through
May 31, 2005.
1. Highlighted on the statement was the date of May 31, 2005, check no.
5375 in the amount of $210.85.
2. The bank statement submitted by Neff had the account number
information and account holder identity deleted.
3. The bank statement was the Borough General Fund account bank
statement with Omega Bank.
c. The bank statement was submitted by Neff as justification that she paid for
the tax notice envelopes.
101. The Bald Eagle Area School District issued check number 23029 in the amount of
$210.85 to Lenna Neff on December 30, 2005, as reimbursement for this
transaction.
a. The reverse side of this check is signed by Lenna J. Neff and was cashed.
Neff, 07 -074
Page 28
102. Borough General Fund check no. 5375 was issued on or about May 18, 2005, in the
amount of $210.85.
a. The payee was Stamp Fulfillment Services, Personalized Envelope Program.
b. The check was signed by Neff and Councilman John Mellott as authorized
signatories.
c. The check cleared the Borough account on May 31, 2005.
103. USPS records confirm an order from Neff on March 6, 2005, to order no. 250484.
a. Item ordered was 1 box Ribbon Star #10 Window, item no. 2142 at $205.00
and $5.85 shipping and handling.
104. The documentation submitted by Neff to the BEASD did not identify that the
Borough had paid for the tax envelopes for the BEASD.
a. Neff's deleting the Borough as the account holder concealed that she did not
incur any expenses related to the envelope purchase.
105. On or about August 9, 2006, Neff placed an order for envelopes with the USPS
Stamp Fulfillment Services.
a. Order no. 32583 confirms an order by Neff, Benjamin Franklin 10W
envelopes, item no. 217290 at a cost of $216.00 plus $6.05 shipping.
b. The item was to be shipped to Neff, as Borough Tax Collector, P.O. Box 534,
Port Matilda, PA.
106. Borough records confirm that check no. 5722 was issued to Stamp Fulfillment
Services on August 19, 2006, in the amount of $218.05.
a. The check was issued as payment for invoice no. 32583.
b. Neff signed the check as an authorized Borough signatory.
c. The Borough had a $4.00 credit with the USPS to account for the difference
between the invoice amount and check amount.
107. Neff did not submit this receipt to the BEASD for reimbursement.
a. Port Matilda Borough was shorted $218.05 as a result of Neff using Borough
funds to pay this expense owed by her as Tax Collector.
108. Neff cashed two reimbursement checks totaling $421.70 she received from the
BEASD owed Port Matilda Borough and utilized an additional $218.05 in Borough
funds for expenses she should have incurred as Tax Collector.
a. This resulted in a financial gain of $639.75 as the result of tax collector
expenses not incurred by Neff.
109. Port Matilda Borough utilized the professional services of John F. Carothers, CPA,
and the accounting firm of Fiore, Fedeli, Snyder, Carothers, LLP, 1601 11 Avenue,
Suite 101, Altoona, PA 16601 to conduct the Borough's annual financial audit.
Neff, 07 -074
Page 29
a. Carothers individually and /or the accounting firm of Fiore, Fedeli, Snyder,
Carothers, LLP conducted financial audits dated December 31, 2002,
December 31, 2003, December 31, 2004, and December 31, 2005.
b. Also included in the audit records is correspondence between the Borough
and the firm relating to audit questions.
c. No specific problems were identified in audits conducted up to and including
the one dated for the year ending December 31, 2004.
110. The audit report for the year ending December 31, 2005, was issued on February 2,
2007.
a. This audit was delayed in being completed as a result of questions regarding
the lack of appropriate documentation for certain expenses.
b. Specifically listed in the report were two transactions fitting into that
category. These transactions were identified as follows:
"Included in General Government expense is $2,800 of expenditures and
included in Highway and Street expenses is $3,708 of expenditures which
are not supported by appropriate documentation. In our opinion, except the
classification as to fund and purpose of the expenditures referred to above
present fairly, in all material respects, the financial position of the
government activities, the business type activities and each major fund of the
borough of Port Matilda, Pennsylvania, as of December 31, 2005, and the
respective changes in financial position and cash flows, where applicable,
thereof for the year then ended in conformity with accounting principles
generally accepted in the United States of America."
c. This actual audit report did not include any further information on these
transactions resulting in the conclusion that neither were supported by
appropriate documentation.
111. Neff responded to questions regarding the transactions lacking in specific
documentation included [sic] correspondence to Karen Bacza along with copies of
General Fund ledgers maintained in a Quickbooks file.
a. Neff sent correspondence dated May 3, 2006 to Karen Bacza who handled
the audit for Fiore, Fideli, Snyder, Carothers, LLP offering a partial
accounting of the checks written to cash which were not supported by
documentation.
b. In that correspondence, Neff wrote that check number 5227 was re-
deposited into the general account on March 31, 2004, and that $1,000.00
and $2,800.00 re- deposits will need to be checked since they are from 2003
and 2005.
112. Bacza documented Neff's explanations in undated handwritten notes which outlined
Neff's explanations as follows:
a. 11/4/03 Cash out of the General acct. for building repairs $2,800.00 ✓
number 4952 (2003 allot.)
11/27/04 Cash out of the General acct. for building repairs $1,500.00 ✓
number 5227 (2004 allot.)
Neff, 07 -074
Page 30
1/25/05 Withdraw out of Council wages savings $1,000.00 for bldg.
Deposited into a savings acct. 3/22/05.
113. To further support her May 3, 2006, explanation of the questioned expenditures,
Neff sent a follow up letter to Fiore, Fedeli, Snyder, and Carothers dated August 2,
2006. Excerpts from that letter include the following explanation:
a. "I have served as Secretary /Treasure [sic] for the Borough of Port Matilda for
the past twelve years until this month when I plan on leaving my job at the
Borough for a new job opportunity. When Ms. Bacza was in the office in
March she asked me to research some information for her and faxed the
information to her when I found it. I had no idea she was holding the audit
until she received the information. I faxed three of the four items to her on
5/3/06 see attached copy of the fax. The other information I did not send to
her pertained to the question about a $1,000.00 transaction from 2005 and a
$2,800.00 transaction from 2003. I have no answer for these transactions
and can only assume that the money was used for the surface water
infiltration protocol testing and well repairs that happened in 2003 and for
which we were unprepared financially, money was used from several
different sources to cover the day to day emergency repairs so that the water
system could keep serving the residents. The audit for 2003 should show
where the funds were used."
114. Neff did not provide Bacza with supporting documentation on the $1,000.00
transaction from 2005 and a $2,800.00 transaction from 2003 because she
converted funds from those transactions for her personal use.
a. Neff cashed General Fund check number 4952 in the amount of $2,800.00
on November 7, 2003.
1. She re- deposited $1,000.00 of this into the General Fund and Water
Works Funds on November 7, 2003, $500.00 cash into each account.
2. This re- deposit was for checks she previously wrote out to Cash from
these accounts.
b. Neff cashed General Fund check number 5428 in the amount of $1,000.00
on August 2, 2005.
1. This check was to be deposited into the Council Wages /Savings
account but was cashed by Neff instead.
115. After considering Neff's explanations Patrick Fiore, CPA submitted correspondence
dated November 2, 2006, to Port Matilda Borough Council.
a. The basis for the letter was regarding issues concerning completion of the
2005 audit dealing with undocumented transactions which were cited in prior
correspondence from Lenna Neff.
b. In the November 2, 2006, memo Fiore writes, in response to your request
for information concerning the open issues of the 2005 audit, the following is
presented.
1. During the year ended December 31, 2003, two checks were made
out to cash as follows:
Neff, 07 -074
Page 31
Check number 4952 $2,800.00 building
Check number (left blank) $1,500.00 drivers /repairs
Our staff was told that the proceeds from these checks were held in
the safe and were available for spending. On March 31, 2004,
$1,500.00 was re- deposited. Lenna indicated the $2,800.00 was still
available.
2. During the year ended December 31, 2004, an additional check
number 5227 for cash of $1,500.00 was issued for driver /repairs at
December 31, 2004, the two checks totaling $4,300.00 were not
documented by receipts.
$2,800.00 from year 2003
$1,500.00 check number 5227
$4,300.00 Total
Lenna indicated that the cash was not used and was to be deposited
on March 22, 2005. This deposit was never documented to the
auditors.
3. For the year ended December 31, 2005, check number 5428 for
$1,000.00 was issued for small tools. Documentation was requested
but never received. At this point, the three checks for $2,800.00,
$1,500.00 and $1,000.00 have not been documented. Adequate
internal controls would indicate that.
1. Checks should not be made out to cash.
2. Checks should be approved before being issued.
3. Checks should be issued as close to the date of the
expenditure as possible.
4. All checks written should be properly documented.
5. Cash should not be left in the safe for long periods of time
without accountability.
Several requests were made to Lenna to resolve these and other
minor issues to complete to audit. As of this date they are still
unresolved."
THE FOLLOWING FINDINGS RELATE TO ALLEGATIONS OF NEFF FAILING TO
FILE STATEMENTS OF FINANCIAL INTERESTS AND FILING DEFICIENT
STATEMENTS OF FINANCIAL INTERESTS
116. Neff, in her official capacities as Secretary /Treasurer and Tax Collector for Port
Matilda Borough, was annually required to file a Statement of Financial Interests
(SFI) Form by May 1 containing information for the prior calendar year.
117. Statement of Financial Interests forms on file with Port Matilda Borough include the
following filings for Neff:
Calendar year: 2006
Filed: 1/3/07 on SEC form 1/07
Position: Tax Collector
Creditors: None
Direct /indirect income: Port Matilda Borough, Bald Eagle Area School District
All other financial interests: None
Calendar year: 2005
Borough Wages
Tax Collector Wages
Calendar
Year
Secretary /Treasurer
Borough
County
School
District
2002
$21,746.51
$1,534.55
$590.00
$5,774.69
2003
$23,746.51
$1,606.18
$583.00
$10,532.19
$45,493.02
$3,140.73
$1,173.00
$16,306.88
Neff, 07 -074
Page 32
Filed: 1/3/06 on SEC form 1/06
Position: Secretary /Treasurer
Creditors: Chrysler Financial .09 %; CSA; Dept. of Welfare
Direct /indirect income: None
All other financial interests: None
Calendar year: 2004
Filed: 3/7/05 on sec form 1/04
Position: Tax Collector Candidate
Creditors: None
Direct /indirect income: Port Matilda Borough
All other financial interests: None
Calendar year: 2004
Filed: 01/18/05 on SEC form 01/05
Position: Tax Collector
Creditors: None
Direct /indirect income: None
All other financial interests: None
Calendar year: 2003
Non -filer
Calendar year: 2002
Non -filer
118. Neff filed two Statements of Financial Interests for calendar year 2004.
a. The first was filed on January 18, 2005, as an incumbent official and the
second one was filed on March 7, 2005, as a candidate for re- election.
119. Neff failed to file required Statement of Financial Interests forms by May 1, 2003,
and May 1, 2004, for the 2002 and 2003 calendar years respectively.
a. Neff was the custodian of these records in her official capacity as
Secretary /Treasurer.
120. Neff received income totaling $66,113.63 during calendar years 2002 and 2003
while not having Statements of Financial Interests filed as noted below:
121. Neff failed to disclose income in excess of $1,300.00 she received from Port Matilda
Borough and the BEASD on her Statement of Financial Interests filed January 3,
2006, for calendar year 2005.
a. Neff received income totaling $18,215.36 from Port Matilda Borough during
2005.
Neff, 07 -074
Page 33
b. Neff received income totaling $3,722.60 from the BEASD during 2005.
122. Neff listed no sources of income on her Statement of Financial Interests filed on
January 18, 2005, for calendar year 2004.
a. Neff did not disclose the BEASD as a source of income on the second 2004
filing on March 7, 2005.
b. Neff received income totaling $25,849.01 from Port Matilda Borough during
2004.
c. Neff received income totaling $3,685.46 from the BEASD during 2004.
123. Financial records of the taxing bodies of Port Matilda Borough, Centre County and
the Bald Area School District reflect Neff received the following annual gross wages
in her official capacity as Tax Collector while failing to file SFI's for calendar years
2002 and 2003 and filing deficient forms for calendar years 2004 through 2006:
Calendar Year
2006
2005
2004
2003
2002
Port Matilda
$2,084.76
$2,031.65
$1,709.85
$1,606.18
$1, 534.55
Centre County
$422.00
$586.00
$620.00
$590.00
$583.00
124. Lenna Neff realized a private pecuniary gain of $13,426.20, as a result of the use of
the authority of her public positions to convert Borough funds for her personal use.
a. Financial gain based on the following totals:
1. Sale of items on EBay using the Borough Computer
(Finding No. 30)*
2. Personal purchases on the Office Depot account
(Finding No. 45)
3. Tax collection account cash withdrawal
(Finding No. 51)
4. Cash withdrawals from Water Works account
(Finding Nos. 66 -71)
5. Cash withdrawals from General Fund account
(Finding Nos. 53 to 65)
6. Receipt of postage reimbursement from the BEASD
due Port Matilda Borough. (Finding No. 108)
7. Postage paid by Borough check instead of from
Tax Collector funds. (Finding No. 108)
8. Cash withdrawals from the Council Wages /Savings
account. (Finding Nos. 75 to 89)
9. General Fund check no. 4952.
(Finding Nos. 72 to 74)
BEASD
$ 5,474.88
$ 3,722.60
$ 3,685.46
$ 5,774.69
$10,532.19
$ 1,669.23
$ 257.28
$ 200.00
$ 1,200.00
$ 5,885.94
$ 421.70
$ 218.05
$ 1,924.00
$ 1, 650.00
$13,426.20
Neff, 07 -074
Page 34
* Items sold by Neff on eBay appear to be the personal property of Neff.
III. DISCUSSION:
As Secretary /Treasurer of Port Matilda Borough ( "Borough ") from approximately
1999 until resigning effective August 17, 2006, and as Borough Tax Collector since at least
1999, Respondent Lenna Neff, hereinafter also referred to as "Respondent," "Respondent
Neff," or "Neff," has been a public official /public employee subject to the provisions of the
Public Official and Employee Ethics Act ( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
The allegations are that Neff violated Sections 1103(a), 1104(a), and 1105(b)(5) of
the Ethics Act when she, as Borough Secretary /Treasurer and Tax Collector: (1) used the
authority of her public position for private pecuniary gain when she utilized Borough and
Tax Collection funds for personal use; (2) made purchases of a personal nature using
Borough credit accounts at Office Depot and Wal -Mart; (3) utilized Borough equipment and
facilities in furtherance of personal Ebay and PayPal business transactions; (4) authorized
and issued payments to her for expenses related to her position as the elected Borough
Tax Collector; (5) used the authority of her position as Borough Tax Collector to bill and
charge her expenses as Tax Collector to the Borough; (6) failed to file Statements of
Financial Interests ( "SFIs ") for calendar years 2002 and 2003; and (7) failed to disclose all
sources of income in excess of $1,300.00 on SFIs for calendar years 2004, 2005, and
2006.
Pursuant to Section 1103(a) of the Ethics Act, a public official /public employee is
prohibited from engaging in conduct that constitutes a conflict of interest:
§ 1103. Restricted activities
(a) Conflict of interest. —No public official or public
employee shall engage in conduct that constitutes a conflict of
interest.
65 Pa.C.S. § 1103(a).
The term "conflict of interest" is defined in the Ethics Act as follows:
§ 1102. Definitions
"Conflict" or "conflict of interest." Use by a public
official or public employee of the authority of his office or
employment or any confidential information received through
his holding public office or employment for the private
pecuniary benefit of himself, a member of his immediate family
or a business with which he or a member of his immediate
family is associated. The term does not include an action
having a de minimis economic impact or which affects to the
same degree a class consisting of the general public or a
subclass consisting of an industry, occupation or other group
which includes the public official or public employee, a
member of his immediate family or a business with which he or
a member of his immediate family is associated.
65 Pa.C.S. § 1102.
Section 1103(a) of the Ethics Act prohibits a public official /public employee from
using the authority of public office /employment or confidential information received by
Neff, 07 -074
Page 35
holding such a public position for the private pecuniary benefit of the public official /public
employee himself, any member of his immediate family, or a business with which he or a
member of his immediate family is associated.
Section 1104(a) of the Ethics Act provides that each public official /public employee
must file an SFI for the preceding calendar year, each year that he holds the position and
the year after he leaves it.
Section 1105(b)(5) of the Ethics Act requires the filer to disclose on the SFI the
name and address of any direct or indirect source of income totaling in the aggregate
$1,300 or more.
As noted above, the parties have submitted a Consent Agreement and Stipulation of
Findings. The parties' Stipulated Findings are reproduced above as the Findings of this
Commission. We shall now summarize the relevant facts as contained therein.
Background information
Respondent Neff served as Borough Secretary /Treasurer from approximately 1999
until resigning effective August 17, 2006. Neff also has served as the elected Borough Tax
Collector since at least 1999.
As Borough Secretary /Treasurer, Neff had primary responsibility for all clerical,
financial and administrative aspects of the Borough's operation. Neff had access to a
Borough owned computer. Neff purchased equipment and services for the Borough. Neff
had signature authority over all Borough bank accounts including the "General Fund,"
"Water Works account," and "Wage and Savings account." Borough checks required
signatures of Neff as Secretary /Treasurer and one Council Member.
As Borough Secretary /Treasurer, Neff reported to Borough Council, but Council did
not closely monitor Neff's daily activities. Neff provided Council with a monthly Treasurer's
Report. Neff was solely responsible for the completion and content of the monthly
Treasurer's Reports. Council relied on Neff's Treasurer's Reports for information on the
Borough's financial status. Neff did not provide to Council invoices, bills or other
information regarding expenditures.
As Borough Tax Collector, Neff was responsible for the collection of real estate and
per capita taxes from Borough property owners for the taxing bodies of the Borough,
Centre County ( "County "), and the Bald Eagle Area School District ( "BEASD "). As
Borough Tax Collector, Neff had signature authority over the Tax Collection account.
Neff's use of Borough and Tax Collection funds for personal purposes
Between July 2002 and December 2005, Neff used the authority of her public
positions as Borough Secretary /Treasurer and Tax Collector to convert Borough funds and
tax collection funds in the total amount of $10,859.94 to her personal use, as calculated at
Fact Finding 90.
Neff concealed her misappropriation of Borough funds from Borough accounts by
providing Council with Treasurer's Reports that included false information. Neff was able
to conceal her misappropriation of funds from the Tax Collection account because she did
not report to Council transactions she made as Tax Collector.
The specific transactions by which Neff converted the aforesaid funds may be
summarized as follows.
On July 12, 2002, Neff issued check number 413 in the amount of $200.00 from the
Neff, 07 -074
Page 36
Borough Tax Collection account to herself. The check was made payable to Neff and was
signed by Neff as an authorized signatory. Neff cashed this check and converted the
funds to her personal use.
Between October 2003 and August 2005, in her official capacity as Borough
Secretary /Treasurer, Neff converted to her personal use six Borough General Fund
checks -- identified as check numbers 4937, 5002, 5227, 5275, 5428, and 5442 -- totaling
$5,885.94. Neff signed the front side of all six checks in her official capacity as
Secretary /Treasurer. Each check also contained the signature of Council Member Kimberly
Klingler. On monthly Treasurer Reports submitted to Council, Neff reported that the
checks were either voided or were made payable to other payees. The checks were
actually made payable to cash or to Neff. Neff endorsed and cashed all six checks and did
not return any money to the Borough or make deposits to any Borough accounts.
On April 18, 2005, in her official capacity as Borough Secretary /Treasurer, Neff
issued check number 2224 in the amount of $1,207.75 from the Borough Water Works
account to reimburse the General Fund for one of the aforesaid checks, check number
5275, which Neff had converted to her personal use. Neff prepared and signed check
number 2224 in her official capacity. On the memo portion of the check and on her
monthly Treasurer Report, Neff represented that the payment was a reimbursement from
the Water Works account for the purchase of water meters made from the Borough
General Fund by check number 5275. Neff's false representation was made to conceal the
fact that she had previously cashed check number 5275 and converted those funds to her
personal use.
Between April 2003 and October 2004, Neff converted funds totaling $1,200 from
the Water Works account to her personal use. Neff prepared, signed as an authorized
signatory, cashed, and converted to personal use three Water Works checks, specifically,
check number 2051 in the amount of $500, check number 2081 in the amount of $500, and
check number 2177 in the amount of $200. Neff represented on monthly Treasurer
Reports that checks 2051 and 2081 had been voided and that check 2177 had been for
topsoil. Neff made these misrepresentations to conceal the fact that she had cashed these
three checks, converting the funds to her personal use.
On November 4, 2003, Neff issued Borough General Fund check number 4952 in
the amount of $2,800 payable to cash. This check was signed by Neff and Council
President, Kim Klinger, and was cashed on November 7, 2003. The memo portion of the
check references building repairs 2003/2004. No records exist of any building repairs for
2003/2004. The check was endorsed by Neff. From these funds, Neff deposited $1,650
into her personal bank account. Neff also deposited $500 into the Borough General Fund
and $500 into the Borough Water Works account, with deposit slips stating the following
reasons for the deposits:
Date Amount Reason
11/07/03 $500.00 Reimbursement Check # 4937 (General Fund Account)
11/07/03 $500.00 Reimbursement Check # 2081 (Water Works Account)
The checks referenced on the deposit slips were checks in the amount of $500 each
that Neff had previously converted to personal use.
Finally, Neff utilized funds from the Borough's General Fund Savings Account,
commonly known as the "Wage and Savings account," for her personal use. Neff made
cash withdrawals from this account and submitted altered and /or inaccurate receipts to
conceal her misappropriation of funds. Neff also made cash withdrawals from this account
without any supporting expense receipts. Neff was able to conceal this activity from
Council by providing inaccurate monthly Treasurer Reports.
Neff, 07 -074
Page 37
The parties have stipulated that Neff made cash withdrawals totaling $1,924 from
the Wage and Savings account that are not supported by any receipts.
During the Borough's financial audit for the year ending December 31, 2005, Neff
provided inaccurate and incomplete information to the auditors to conceal her conversion
of Borough funds to personal use.
Neff's use of Borough credit accounts at Office Depot and Wal -Mart for purchases of
a personal nature
The Borough maintains credit accounts at Lowes, Wal -Mart and Office Depot. The
Borough credit accounts are to be used for Borough purchases only.
Neff, as Secretary /Treasurer, was assigned control over the Wal -Mart and Office
Depot credit accounts. As the sole office employee, Neff was the only Borough employee
authorized to make purchases using these credit accounts. Between 2003 and 2006, Neff
utilized Borough credit accounts at Wal -Mart and Office Depot to make purchases of a
personal nature.
Neff routinely made personal purchases on the Borough's Wal -Mart account,
without Council approval. As Secretary /Treasurer, Neff was the only Borough official to
review Wal -Mart invoices prior to payment being issued by the Borough. At times, Neff
would reimburse the Borough for personal purchases she made at Wal -Mart. When Wal-
Mart statements were received by the Borough, Neff would issue payments from her
personal account to Wal -Mart for expenses she deemed to be personal.
Wal -Mart does not maintain records for transactions occurring prior to 2006. During
2006, Neff issued eight (8) checks totaling $706.96 from her personal account to Wal -Mart
in payment of personal purchases she made and charged to the Borough account.
The Stipulated Findings do not quantify a private pecuniary benefit as to Neff's use
of the Wal -Mart credit account.
Neff also made purchases of a personal nature using the Borough's credit account
at Office Depot. Neff did not have authorization from Borough Council to make personal
purchases using the Office Depot credit account. The personal items that Neff purchased
included video games, videotapes, calling card airtime and computer equipment and
accessories including a laptop computer bag. Neff did not reimburse the Borough for her
personal purchases made at Office Depot using the Borough's credit account.
Between January 2003 and June 2005, Neff made personal purchases totaling
$257.28 on the Borough's Office Depot account. In her official capacity as Borough
Secretary /Treasurer, Neff signed the front side of all Borough checks that were issued to
pay for these personal purchases. See, Fact Findings 41 and 44. These checks also
included the signature of one Council Member.
The parties have stipulated that Neff realized a private pecuniary gain of $257.28
when she charged items of a personal nature on the Borough's account with Office Depot
and then participated in authorizing payments from Borough accounts for those personal
purchases.
Neff's use of Borough equipment and facilities in furtherance of personal Ebay and
PayPal business transactions
Between July 10, 2003, and July 30, 2006, Neff routinely utilized the Borough
computer and Internet access to conduct her personal online eBay transactions. Neff
regularly bought, sold and bid on items on eBay using the Borough computer and Internet
Neff, 07 -074
Page 38
connection. Neff used the Borough computer to access PayPal, eBay's online payment
system, a minimum of sixty -five times between January 15, 2004, and May 4, 2006. None
of the eBay activity conducted by Neff related to her official duties. All such activity related
to Neff's personal eBay business. Borough Council was not aware that Neff was utilizing
the Borough computer in furtherance of her eBay auction business.
The parties have stipulated that Neff realized a private pecuniary gain of at least
$1,669.23 as a result of using Borough equipment to complete eBay sales transactions.
Neff's use of the authority of her public positions to charge the Borouqh- -and
authorize /issue payments from the Borouqh - -for her expenses as Tax Collector
In her official capacity as Borough Tax Collector, Neff was responsible for ordering
envelopes to mail tax bills to Borough property owners or their designees. The cost of
these envelopes was supposed to be paid by Neff initially, with reimbursement being made
to Neff by the appropriate taxing body. Past practice for envelope purchases was for the
Tax Collector to purchase envelopes from Tax Collector funds and then be reimbursed by
the appropriate taxing body. The Borough was to reimburse for Borough tax notices sent
in the spring of each year. The BEASD was to reimburse for real estate tax notices sent in
the summer of each year.
As Borough Tax Collector, Neff routinely purchased such envelopes from the United
States Postal Service (USPS) Personalized Envelope Program.
On two occasions between June 2004 and May 2005, Neff utilized Borough funds to
pay for BEASD tax notice envelopes purchased from USPS. (See, Fact Findings 94 -104).
The total cost for each of these purchases was $210.85. As Borough Secretary/Treasurer,
Neff signed, as an authorized signatory, the Borough checks that were used to pay for
these purchases. As Tax Collector, Neff submitted to the BEASD requests for
reimbursement of the cost of these purchases, without revealing to BEASD that the
purchases had actually been paid for by the Borough. As supporting documentation for
each purchase, Neff submitted a USPS reorder form indicating the amount of the charge,
with a notation of a date and check number by which it had been paid. As additional
supporting documentation for the second order, Neff submitted the Borough's bank
account statement listing the check that had paid for the order, with the account number
and identity of the account holder deleted. The bank statement was submitted by Neff as
justification that she had paid for the tax notice envelopes. Neff's deletion of the Borough
as the account holder concealed that she did not incur any expenses related to the
envelope purchase.
Neff received two checks from the BEASD (check numbers 19744 and 23029), each
in the amount of $210.85 made payable to Neff, as payments for the two envelope
purchases. Neff cashed the BEASD checks and did not provide any reimbursement to the
Borough.
Additionally, on or about August 9, 2006, Neff as Tax Collector placed another order
for envelopes with the USPS Stamp Fulfillment Services at a total cost of $222.05. On
August 19, 2006, Borough check number 5722 in the amount of $218.05 was issued to
Stamp Fulfillment Services as payment for the order. Neff signed the check as an
authorized Borough signatory. (The Borough had a $4.00 credit with the USPS to account
for the difference between the invoice amount and check amount.) Neff did not submit the
receipt for this purchase to the BEASD for reimbursement. The Borough was shorted as a
result of Neff using Borough funds to pay this expense owed by her as Tax Collector.
The parties have stipulated that by cashing the two reimbursement checks from the
BEASD totaling $421.70, and utilizing the additional $218.05 in Borough funds for
expenses she should have incurred as Tax Collector, Neff received a financial gain in the
Neff, 07 -074
Page 39
amount of $639.75 as to the aforesaid envelope purchases.
Total private pecuniary benefit received by Neff
The parties have stipulated that as a result of the aforesaid actions by Neff in her
official capacities, Neff realized a total private pecuniary gain in the amount of $13,426.20,
as calculated at Fact Finding 124 a.
Neff's SFIs
In her official capacities as Borough Secretary /Treasurer and Tax Collector, Neff
was required to annually file an SFI form by May 1 containing information for the prior
calendar year.
Per the Stipulated Findings and Consent Agreement, Neff failed to file SFIs for the
2002 and 2003 calendar years and failed to disclose all sources of income of $1,300 or
more on her SFIs for calendar years 2004, 2005, and 2006.
In 2004, Neff received income totaling $25,849.01 from the Borough and income
totaling $3,685.46 from the BEASD. Neff filed two SFIs for calendar year 2004. The first
SFI was filed on January 18, 2005, as an incumbent official, and the second SFI was filed
on March 7, 2005, as a candidate for re- election. Neff listed no sources of income on her
SFI filed January 18, 2005, for calendar year 2004. Neff did not disclose the BEASD as a
source of income on her SFI filed March 7, 2005, for calendar year 2004.
In 2005, Neff received income totaling $18,215.36 from the Borough and income
totaling $3,722.60 from the BEASD. Neff listed no sources of income on her SFI filed for
calendar year 2005.
In 2006, Neff received income in excess of $1,300.00 from both the Borough and
the BEASD. (Fact Finding 123). Both the Borough and the BEASD were listed as sources
of income on Neff's SFI filed for calendar year 2006. (Fact Finding 117). The parties have
stipulated that Neff's SFI filed for calendar year 2006 was deficient without specifying
which particular information was omitted. (Fact Finding 123).
Having highlighted the Stipulated Findings and issues before us, we shall now apply
the Ethics Act to determine the proper disposition of this case.
The parties' Consent Agreement sets forth a proposed resolution of the allegations
as follows:
3. The Investigative Division will recommend the following in relation to
the above allegations:
a. That a violation of Section 1103(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred in relation
to Neff's use of borough and tax collection funds for personal
use;
b. That a violation of Section 1103(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred in relation
to Neff's use of borough credit accounts at Office Depot and
Wal -Mart to make purchases of a personal nature;
c. That a violation of Section 1103(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred in relation
to Neff's use of borough equipment and facilities in furtherance
Neff, 07 -074
Page 40
of personal Ebay and PayPal business transactions;
d. That a violation of Section 1103(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred in relation
to Neff's use of her authority as a public official /public
employee to authorize and issue payments to her for expenses
related to her position as the elected borough tax collector;
e. That a violation of Section 1103(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1103(a) occurred in relation
to Neff's use of her authority as a public official /public
employee to bill and charge her expenses as tax collector to
Port Matilda Borough;
f. That a violation of Section 1104(a) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1104(a) occurred in relation
to Neff's failure to file Statements of Financial Interests for
calendar years 2002 and 2003; and
That a violation of Section 1105(b)(5) of the Public Official and
Employee Ethics Act, 65 Pa.C.S. §1105(b)(5) occurred in
relation to Neff's failure to disclose all sources of income in
excess of $1,300.00 on Statements of Financial Interests for
calendar years 2004, 2005, and 2006.
g.
4. In settlement of this matter and under the terms of this Consent
Agreement, Neff agrees to make payment in the amount of
$12,000.00 as follows:
a. An initial payment of $6,000.00, by way of certified check,
payable to the Borough of Port Matilda and forwarded to the
Pennsylvania State Ethics Commission for compliance
purposes, is due within thirty (30) days of the issuance of the
final adjudication in this matter; and
b. The remaining balance of $6,000.00 is due within twenty -four
(24) months from the payment date of the initial $6,000.00.
The remaining $6,000.00 balance is payable in monthly
installments, by way of certified check, payable to the Borough
of Port Matilda and forwarded to the Pennsylvania State Ethics
Commission for compliance purposes, in an amount of at least
$250.00, due on or before the last day of each month until the
remaining $6,000.00 is paid in full. The first monthly payment
shall not be due any sooner than 30 days from receipt of the
initial $6,000.00 payment. The first monthly payment shall be
due at the end of the month following the month in which the
original $6,000.00 payment is due (e.g. if the initial $6,000.00
is paid November 15, 2008 the first monthly payment shall be
due by the end of December 2008 and the end of each month
thereafter). Neff may prepay this balance at any time.
5. Neff agrees to file complete and accurate Statements of Financial
Interests with the Borough of Port Matilda, through the Pennsylvania
State Ethics Commission, for calendar years 2002, 2003, 2004, 2005,
and 2006 within thirty (30) days of the issuance of the final
adjudication in this matter.
Neff, 07 -074
Page 41
6. The Investigative Division will recommend that this matter be referred
for review by the appropriate law enforcement authorities. Such
referral, however, does not prohibit the Commission from initiating
appropriate enforcement actions in the event of Respondent's failure
to comply with this agreement or the Commission's order or
cooperating with any other authority who may so choose to review
this matter further.
Consent Agreement, at 2 -3.
In considering the Consent Agreement, we agree with the parties that a violation of
Section 1103(a) of the Ethics Act occurred in relation to Neff's use of Borough funds and
tax collection funds for personal use. Each element of a violation has been established.
Between July 2002 and December 2005, Neff used the authority of her public
positions as Borough Secretary /Treasurer and Tax Collector to convert Borough funds and
tax collection funds in the total amount of $10,859.94 to her personal use, as calculated at
Fact Finding 90. Neff used the authority of her public positions when she prepared and
signed as an authorized signatory checks from Borough accounts and the Tax Collection
account, which checks Neff then cashed and converted to personal use. Neff used the
authority of her public position as Borough Secretary /Treasurer when she made cash
withdrawals from the Borough's Wage and Savings Account for her personal use. Neff
further used the authority of her position as Borough Secretary /Treasurer when she
prepared and submitted Treasurer's reports containing false information, when she
submitted altered and /or inaccurate receipts to conceal her misappropriation of funds from
the Wage and Savings Account, when she moved money among Borough accounts based
upon false representations, and when she provided inaccurate and incomplete information
to auditors, to conceal her conversion of Borough funds to personal use.
The resulting private pecuniary benefit to Neff consisted of the $10,859.94 of
Borough and tax collection funds that Neff converted to personal use.
With each element of a violation of Section 1103(a) established, we hold that a
violation of Section 1103(a) of the Ethics Act occurred in relation to Neff's use of Borough
and tax collection funds for personal use. Cf., Rhone, Order 1430; Walters, Order 1361;
Fish, Order 1328; Colella, Order 1130.
We further accept the parties' recommendation that we find a violation of Section
1103(a) of the Ethics Act in relation to Neff's use of Borough credit accounts at Office
Depot and Wal -Mart to make purchases of a personal nature.
Certainly Neff used the authority of her public position as Borough
Secretary /Treasurer when she used the Borough credit accounts at Wal -Mart and Office
Depot to make personal purchases, and when she prepared and signed, as an authorized
signatory, payments from Borough accounts to pay for her personal purchases from Office
Depot. Such actions by Neff are sufficient to establish the first element of a violation of
Section 1103(a) of the Ethics Act. Cf., Evans, Order 1457; Pierce, Order 1449; Krisher,
Order 1425; Gorr, Order 1423; Cobb, Order 1354. As for the element of a private
pecuniary benefit, the Stipulated Findings establish that Neff received a private pecuniary
benefit of $257.28 as a result of using the Borough credit account at Office Depot for
personal purchases. The Stipulated Findings do not quantify a private pecuniary benefit
as to Neff's use of the Wal -Mart credit account.
We are mindful of the judicial decision in Bixler v. State Ethics Commission, 847
A.2d 785 (Pa. Cmwlth. 2004) (holding that a net profit in the amount of $561.77 resulting
from business transactions between a township supervisor's employer and the township
would fall within the "de minimis" exclusion to the definition of "conflict of interest "). If the
Neff, 07 -074
Page 42
parties had not determined to enter into a Consent Agreement, we could have been
presented with factual and legal issues as to whether, under the circumstances of this
case, Bixler would apply as to the private pecuniary benefit received by Neff from using
Borough credit accounts for personal purchases.
However, given: (1) that the parties have entered into a comprehensive Consent
Agreement with benefit of legal counsel; and (2) the parties are in agreement that a
violation of Section 1103(a) as to Neff's use of the Borough credit accounts at Wal -Mart
and Office Depot for personal purchases would be appropriate as part of an overall
settlement of this case, we shall accept the parties' proposed disposition. We note that
this determination in this case based upon the agreement of the parties should not be
considered as precedent for other cases, which would be determined based upon their
own facts and circumstances.
Accordingly, we hold that a violation of Section 1103(a) of the Ethics Act occurred in
relation to Neff's use of borough credit accounts at Office Depot and Wal -Mart to make
purchases of a personal nature.
Based upon the Stipulated Findings, an additional violation of Section 1103(a) of
the Ethics Act occurred in relation to Neff's use of Borough equipment and facilities in
furtherance of personal Ebay and PayPal business transactions.
Neff routinely used the Borough computer and Internet access to conduct her
personal eBay auction business. It is axiomatic that Section 1103(a) of the Ethics Act
prohibits the use of governmental facilities, equipment, and the like for private purposes,
including business purposes. See, e.q., Morton, Order 1491; Rembold, Order 1417; Cobb,
Order 1354; Confidential Opinion, 05 -001.
But for being the Borough Secretary /Treasurer, Neff would not have been in a
position to use the Borough computer and Internet access. Borough Council was not
aware that Neff was utilizing the Borough computer in furtherance of her eBay auction
business.
The parties have stipulated that Neff realized a private pecuniary gain of at least
$1,669.23 as a result of using Borough equipment to complete eBay sales transactions.
With each element of a violation of Section 1103(a) established, we hold that a
violation of Section 1103(a) of the Ethics Act occurred in relation to Neff's use of Borough
equipment and facilities in furtherance of personal Ebay and PayPal business
transactions.
The parties have recommended that we find two violations of Section 1103(a) of the
Ethics Act with regard to Neff's use of the authority of her public positions to charge the
Borough - -and to authorize /issue payments from the Borough - -for her expenses as Tax
Collector. These particular recommendations pertain to the payment by the Borough for
the envelopes used by Neff as Tax Collector for sending out tax bills for the BEASD.
On two occasions between June 2004 and May 2005, Neff utilized Borough funds to
pay for BEASD tax notice envelopes purchased from the USPS. (See, Fact Findings 94-
104). The total cost for each of these purchases was $210.85. Neff used the authority of
her public positions as Borough Tax Collector and Borough Secretary /Treasurer to order
the envelopes from the USPS at Borough expense, rather than at her own expense as Tax
Collector. Neff used the authority of her public position as Borough Secretary/Treasurerto
pay for the envelopes with Borough checks that Neff signed as an authorized signatory. As
Tax Collector, Neff submitted to the BEASD requests for reimbursement of the cost of
these purchases, without revealing to BEASD that the purchases had actually been paid
for by the Borough. As Tax Collector, Neff received two checks from the BEASD, each in
Neff, 07 -074
Page 43
the amount of $210.85 made payable to Neff, as payments for the two envelope
purchases. As Tax Collector, Neff cashed the BEASD checks and did not provide any
reimbursement to the Borough.
On a third occasion, in or about August 2006, Neff as Tax Collector placed another
order with the USPS for envelopes at a total cost of $222.05. Neff used the authority of
her public positions as Borough Tax Collector and Borough Secretary /Treasurer to order
the envelopes from the USPS at Borough expense, rather than at her own expense as Tax
Collector. As Borough Secretary /Treasurer, Neff signed the Borough check in the amount
of $218.05 that was used to pay for the order. As Tax Collector, Neff did not submit the
receipt for this purchase to the BEASD for reimbursement. To the extent Neff did not
submit the expense to the BEASD for reimbursement, it was an expense that Neff, not the
Borough, should have paid. The parties have stipulated that the Borough was shorted as
a result of Neff using Borough funds to pay this expense owed by her as Tax Collector.
The parties have stipulated that by cashing the two reimbursement checks from the
BEASD totaling $421.70, and utilizing the additional $218.05 in Borough funds for
expenses she should have incurred as Tax Collector, Neff received a financial gain in the
amount of $639.75.
Accordingly, we hold that a violation of Section 1103(a) of the Ethics Act occurred in
relation to Neff's use of her authority as a public official /public employee to authorize and
issue payments from the Borough for expenses related to her position as the elected
Borough Tax Collector. We further hold that a violation of Section 1103(a) of the Ethics
Act occurred in relation to Neff's use of her authority as a public official /public employee to
bill and charge her expenses as Tax Collector to the Borough.
As for the allegations pertaining to Neff's SFIs, it is clear that as Borough
Secretary /Treasurer and Borough Tax Collector, Neff was required to file SFIs each year
by May 1, providing financial disclosure for the prior calendar year as specified by the
Ethics Act. Per the Stipulated Fact Findings and Consent Agreement, Neff failed to file
SFIs for calendar years 2002 and 2003 with the Borough. We hold that a violation of
Section 1104(a) of the Ethics Act occurred in relation to Neff's failure to file SFIs for
calendar years 2002 and 2003 with the Borough.
Based upon the Stipulated Fact Findings, both the Borough and the BEASD should
have been listed as sources of income on Neff's SFIs for calendar years 2004 and 2005.
Neff filed two SFIs for calendar year 2004. Neff listed no sources of income on her SFI
filed January 18, 2005, for calendar year 2004. Neff did not disclose the BEASD as a
source of income on her SFI filed March 7, 2005, for calendar year 2004. Neff listed no
sources of income on her SFI filed for calendar year 2005.
Both the Borough and the BEASD were listed as sources of income on Neff's SFI
filed for calendar year 2006. (Fact Finding 117). The parties have stipulated that Neff's
SFI filed for calendar year 2006 was deficient without specifying which particular
information was omitted. (Fact Finding 123). Nevertheless, per the Consent Agreement,
the parties are in agreement that Neff failed to disclose all of the sources of income that
she was required to list on her SFIs for calendar years 2004, 2005, and 2006.
We hold that a violation of Section 1105(b)(5) of the Ethics Act occurred in relation
to Neff's failure to disclose all sources of income of $1,300.00 or more on her SFIs for
calendar years 2004, 2005, and 2006.
As part of the settlement of this matter, Neff has agreed to make payment to the
Borough in the amount of $12,000.00, through the payment arrangement detailed at
Paragraphs 4 a and 4 b of the Consent Agreement.
Neff, 07 -074
Page 44
Neff has also agreed to file complete and accurate SFIs for calendar years 2002,
2003, 2004, 2005, and 2006 with the Borough through this Commission, within thirty (30)
days of the issuance of the final adjudication in this matter.
As part of the Consent Agreement, the Investigative Division has recommended that
this matter be referred for review by the appropriate law enforcement authorities.
We determine that the Consent Agreement submitted by the parties sets forth the
proper disposition for this case, based upon our review as reflected in the above analysis
and the totality of the facts and circumstances.
Accordingly, Neff is directed to make payment in the amount of $12,000.00 as
follows:
a. An initial payment of $6,000.00, by way of certified check, payable to
the Borough of Port Matilda and forwarded to the Pennsylvania State
Ethics Commission for compliance purposes, is due within thirty (30)
days of the issuance of the final adjudication in this matter; and
b. The remaining balance of $6,000.00 is due within twenty -four (24)
months from the payment date of the initial $6,000.00. The remaining
$6,000.00 balance is payable in monthly installments, by way of
certified check, payable to the Borough of Port Matilda and forwarded
to the Pennsylvania State Ethics Commission for compliance
purposes, in an amount of at least $250.00, due on or before the last
day of each month until the remaining $6,000.00 is paid in full. The
first monthly payment shall not be due any sooner than 30 days from
receipt of the initial $6,000.00 payment. The first monthly payment
shall be due at the end of the month following the month in which the
original $6,000.00 payment is due (e.g. if the initial $6,000.00 is paid
November 15, 2008, the first monthly payment shall be due by the
end of December 2008 and the end of each month thereafter). Neff
may prepay this balance at any time.
To the extent she has not already done so, Neff is directed to file complete and
accurate SFIs with the Borough, through this Commission, for calendar years 2002, 2003,
2004, 2005, and 2006 by no later than the thirtieth (30 day after the mailing date of this
adjudication and Order.
Non - compliance with either of the above directives for payment to the Borough and
for the filing of SFIs with the Borough will result in the institution of an order enforcement
action.
Additionally, given the egregious nature of the violations of Section 1103(a) of the
Ethics Act, this case will be referred to the Centre County District Attorney, the
Pennsylvania Attorney General, and the U.S. Attorney for review and appropriate action.
IV. CONCLUSIONS OF LAW:
1. As Secretary /Treasurer of Port Matilda Borough ( "Borough ") from approximately
1999 until resigning effective August 17, 2006, and as Borough Tax Collector since
at least 1999, Respondent Lenna Neff ( "Neff ") has been a public official /public
employee subject to the provisions of the Public Official and Employee Ethics Act
( "Ethics Act "), 65 Pa.C.S. § 1101 et seq.
2. Neff violated Section 1103(a) of the Ethics Act when she used Borough and tax
collection funds for personal use.
Neff, 07 -074
Page 45
3. Neff violated Section 1103(a) of the Ethics Act when she used Borough credit
accounts at Office Depot and Wal -Mart to make purchases of a personal nature.
4. Neff violated Section 1103(a) of the Ethics Act when she used Borough equipment
and facilities in furtherance of personal Ebay and PayPal business transactions.
5. Neff violated Section 1103(a) of the Ethics Act when she used her authority as a
public official /public employee to authorize and issue payments from the Borough
for expenses related to her position as the elected Borough Tax Collector.
6. Neff violated Section 1103(a) of the Ethics Act when she used her authority as a
public official /public employee to bill and charge her expenses as Tax Collector to
the Borough.
7 Neff violated Section 1104(a) of the Ethics Act when she failed to file SFIs for
calendar years 2002 and 2003 with the Borough.
8. Neff violated Section 1105(b)(5) of the Ethics Act when she failed to disclose all
sources of income of $1,300.00 or more on her SFIs for calendar years 2004, 2005,
and 2006.
In Re: Lenna Neff,
Respondent
ORDER NO. 1498
File Docket: 07 -074
Date Decided: 12/4/08
Date Mailed: 12/19/08
1 Lenna Neff ( "Neff "), a public official /public employee in her capacities as
Secretary /Treasurer of Port Matilda Borough ( "Borough ") from approximately 1999
until resigning effective August 17, 2006, and as Borough Tax Collector since at
least 1999, violated Section 1103(a) of the Public Official and Employee Ethics Act
( "Ethics Act "), 65 Pa.C.S. § 1103(a), when she used Borough and tax collection
funds for personal use.
2. Neff violated Section 1103(a) of the Ethics Act when she used Borough credit
accounts at Office Depot and Wal -Mart to make purchases of a personal nature.
3. Neff violated Section 1103(a) of the Ethics Act when she used Borough equipment
and facilities in furtherance of personal Ebay and PayPal business transactions.
4. Neff violated Section 1103(a) of the Ethics Act when she used her authority as a
public official /public employee to authorize and issue payments from the Borough
for expenses related to her position as the elected Borough Tax Collector.
5. Neff violated Section 1103(a) of the Ethics Act when she used her authority as a
public official /public employee to bill and charge her expenses as Tax Collector to
the Borough.
6. Neff violated Section 1104(a) of the Ethics Act, 65 Pa.C.S. § 1104(a), when she
failed to file Statements of Financial Interests ( "SFIs ") for calendar years 2002 and
2003 with the Borough.
7 Neff violated Section 1105(b)(5) of the Ethics Act, 65 Pa.C.S. § 1105(b)(5), when
she failed to disclose all sources of income of $1,300.00 or more on her SFIs for
calendar years 2004, 2005, and 2006.
8. Per the Consent Agreement of the parties, Neff is directed to make payment in the
amount of $12,000.00 as follows:
a. An initial payment of $6,000.00, by way of certified check, payable to
the Borough of Port Matilda and forwarded to the Pennsylvania State
Ethics Commission for compliance purposes, is due within thirty (30)
days of the issuance of the final adjudication in this matter; and
b. The remaining balance of $6,000.00 is due within twenty -four (24)
months from the payment date of the initial $6,000.00. The remaining
$6,000.00 balance is payable in monthly installments, by way of
certified check, payable to the Borough of Port Matilda and forwarded
to the Pennsylvania State Ethics Commission for compliance
purposes, in an amount of at least $250.00, due on or before the last
day of each month until the remaining $6,000.00 is paid in full. The
first monthly payment shall not be due any sooner than 30 days from
Neff, 07 -074
Page 47
receipt of the initial $6,000.00 payment. The first monthly payment
shall be due at the end of the month following the month in which the
original $6,000.00 payment is due (e.g. if the initial $6,000.00 is paid
November 15, 2008, the first monthly payment shall be due by the
end of December 2008 and the end of each month thereafter). Neff
may prepay this balance at any time.
9. To the extent she has not already done so, Neff is directed to file complete and
accurate SFIs with the Borough, through this Commission, for calendar years 2002, 2004, 2005, and 2006 by no later than the thirtieth (30t ") day after the mailing
date of this Order.
10. Non - compliance with Paragraphs 8 and 9 of this Order will result in the institution of
an order enforcement action.
11. This matter will be referred to the Centre County District Attorney, the Pennsylvania
Attorney General, and the U.S. Attorney for review and appropriate action.
BY THE COMMISSION,
Louis W. Fryman, Chair