HomeMy WebLinkAbout1305 WarnerIn Re: Eula Lorraine Warner
File Docket:
X -ref:
Date Decided:
Date Mailed:
Before: Louis W. Fryman, Chair
John J. Bolger, Vice Chair
Daneen E. Reese
Frank M. Brown
Donald M. McCurdy
Michael Healey
Paul M. Henry
02- 065 -C2
Order No. 1305
12/1/03
12/15/03
This is a final adjudication of the State Ethics Commission.
Procedurally, the Investigative Division of the State Ethics Commission conducted an
investigation regarding a possible violation of the Public Official and Employee Ethics Act, Act
9 of 1989, P.L. 26, 65 P.S. §§ 401 et seq., as codified by Act 93 of 1998, Chapter 11, 65
Pa.C.S. § 1101 et seq., by the above -named Respondent. At the commencement of its
investi9ation, the Investigative Division served upon Respondent written notice of the specific
allegation(s). Upon completion of its investi9ation the Investigative Division issued and
served upon Respondent a Findings Report identified as an "Investigative Complaint." An
Answer was filed and a hearing was waived. A Consent Agreement and Stipulation of
Findings were submitted by the parties to the Commission for consideration. The Stipulation
of Findings is quoted as the Findings in this Order. The Consent Agreement was
subsequently approved.
Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11
of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and
provides for the completion of pending matters under Act 93 of 1998.
This adjudication of the State Ethics Commission is issued under Act 93 of 1998 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 Chapter 11 of Act 93 of
1998. Any person who violates confidentiality of the Ethics Act is guilty of a misdemeanor
subject to a fine of not more than $1,000 or imprisonment for not more than one year.
Confidentiality does not preclude discussing this case with an attorney at law.
Warner 02- 065 -C2
Page 2
I. ALLEGATION:
That Eula Lorraine Warner, a (public official /public employee) in her capacity as a
Supervisor and Treasurer for Hanover Township, Beaver County, violated Sections 1103(a)
and 1104(a) of the Public Official and Employee Ethics Law (65 Pa.C.S. §1101 et seq.), when
she used the authority of her office for a private pecuniary gain, including but not limited to
retaining monies collected from scrap collections in her possession; and when she failed to file
Statements of Financial Interests for calendar years 1999 and 2001.
II. FINDINGS:
1. Eula Lorraine Warner has served as a supervisor for Hanover Township, Beaver
County, since January 2000.
a. Warner currently serves as the chairperson of the board of supervisors.
2. Prior to being elected township supervisor, Warner served as the township
secretary /treasurer from January 1996 through December 1999.
3. Warner served in an employment capacity for the township while serving as a
supervisor as follows:
a. January 2000- November 2000:
b. November 2000- December 2001:
c. December 2001- October 2002:
d. November 2002- December 2002:
a.
b.
c.
Secretary and Treasurer
Treasurer
Assistant Treasurer
Assistant Treasurer
4. Warner's duties as the treasurer and assistant treasurer included the following:
a. Warner was responsible for making deposits into the township accounts
including general fund and liquid fuels account.
b. The assistant treasurer was responsible for the duties of the treasurer in the
treasurer's absence and assisting the treasurer as needed.
5. The township recycles scrap metal obtained from projects and other sources at a local
salvage yard.
The township roadmaster is responsible for taking the scrap metal to the
salvage yard.
Scrap metal is recycled periodically during the year at the direction of the
township roadmaster.
Scrap metal is taken to Grubbs Auto Wrecking, M.T. Can, and Six Recycling.
6. Supervisor Ray Jordan served as the roadmaster for Hanover Township from January
2000 through December 2002.
a. Jordan was responsible for disposing of scrap metal during this period.
7. After taking the scrap metal to the salvage yard, Jordan was responsible for turning the
money received over to Warner for it to be recorded and deposited into the appropriate
township account.
Warner 02- 065 -C2
Page 3
a. Funds were not always given directly to Warner.
b. Occasionally, scrap metal funds and receipts were left on or in file cabinets.
8. The township has utilized the services of Mark C. Turnley, CPA, to complete the yearly
audit of the township accounts starting with the audit for calendar year 1999.
a. Turnley has completed audits for 1999, 2000 and 2001 for the township.
b. The audit process includes reviewing and comparing the township general
ledger book, which lists account balances, assets, debits, etc., to account
statements and other documentation.
c. Turnley includes a review of scrap metal proceeds in his audit.
9. In or around March 2002 while conducting the audit for calendar year 2001, Turnley
noticed that there was no record of the township depositing scrap metal proceeds into a
township account.
a. There were records of scrap metal deposits in 1999 and 2000.
b. Turnley recommended that the township accurately document the receipt and
deposit of the scrap metal proceeds in township records in his audit reports for
calendar years 1999 and 2000.
10. In March 2002, Turley attempted to determine whether there were scrap metal
proceeds in 2001.
a. Warner was unavailable as she was vacationing in Las Vegas, NV.
b. Turnley requested Jordan to obtain this information.
c. Jordan confirmed to Turnley that the township recycled scrap metal in 2001.
11. Jordan provided a list to Turnley outlining the dates, location, and the amounts received
for recycling scrap metal as follows:
Date
Location
Amount
$94.05
03
-29
-01
M.T. Can
04
-10
-01
Grubbs
38.75
04
-14
-01
Grubbs
39.75
04
-16
-01
Grubbs
23.25
04
-28
-01
Grubbs
41.50
04
-30
-01
Grubbs
38.50
05
-05
-01
Grubbs
41.75
05
-07
-01
Grubbs
19.75
05
-14
-01
Grubbs
43.25
05
-21
-01
Grubbs
41.50
05
-22
-01
M.T. Can
73.50
05
-29
-01
Grubbs
23.50
06
-04
-01
Grubbs
50.25
06
-11
-01
Grubbs
48.25
06
-18
-01
Grubbs
36.00
06
-27
-01
Grubbs
38.25
06
-30
-01
Grubbs
49.25
Warner 02- 065 -C2
Page 3
a. Funds were not always given directly to Warner.
b. Occasionally, scrap metal funds and receipts were left on or in file cabinets.
8. The township has utilized the services of Mark C. Turnley, CPA, to complete the yearly
audit of the township accounts starting with the audit for calendar year 1999.
a. Turnley has completed audits for 1999, 2000 and 2001 for the township.
b. The audit process includes reviewing and comparing the township general
ledger book, which lists account balances, assets, debits, etc., to account
statements and other documentation.
c. Turnley includes a review of scrap metal proceeds in his audit.
9. In or around March 2002 while conducting the audit for calendar year 2001, Turnley
noticed that there was no record of the township depositing scrap metal proceeds into a
township account.
a. There were records of scrap metal deposits in 1999 and 2000.
b. Turnley recommended that the township accurately document the receipt and
deposit of the scrap metal proceeds in township records in his audit reports for
calendar years 1999 and 2000.
10. In March 2002, Turley attempted to determine whether there were scrap metal
proceeds in 2001.
a. Warner was unavailable as she was vacationing in Las Vegas, NV.
b. Turnley requested Jordan to obtain this information.
c. Jordan confirmed to Turnley that the township recycled scrap metal in 2001.
11. Jordan provided a list to Turnley outlining the dates, location, and the amounts received
for recycling scrap metal as follows:
Date
Date
Location
Grubbs
Amount
39.00
07
-17
-01
07
-21
-01
Grubbs
42.00
07
-28
-01
M.T. Can
199.75
08
-03
-01
Grubbs
39.75
08
-14
-01
Grubbs
60.75
08
-28
-01
Grubbs
46.50
09
-11
-01
Grubbs
62.50
09
-25
-01
Grubbs
27.00
10
-02
-01
Grubbs
35.50
12
-13
-01
Six Recycling
71.09
Total:
$1364.89
Date
Weight
Rate
Amount
04 -10 -01
31 .00
1 .25
$38 75
Warner 02- 065 -C2
Page 4
12. In or around April 2002, Turnley questioned Warner about the scrap metal when she
returned from Las Vegas.
a. Warner informed Turnley that she did not deposit the scrap metal proceeds and
that she had funds in her possession from scrap metal recycling.
13. On April 12, 2002, Warner faxed to Turnley an adding machine tape and several
receipts reflecting scrap metal recycling.
14. The adding machine tape provided by Warner outlined the following amounts:
Amount
$41.50
62.50
39.75
39.75
23.25
38.75
41.75
19.75
43.25
41.50
50.25
23.50
36.00*
48.25*
39.00*
60.75*
38.25
42.00
46.50
38.50
$814.75
a. Warner did not provide receipts to Turnley for the amounts listed on the above
list denoted with an asterisk
15. Warner provided the following receipts to Turnley totaling $631.00 reflecting scrap
metal proceeds:
Date
Weight
Rate
Amount
04 -14 -01
31.80
1.25
39.75
04 -16 -01
18.60
1.25
23.25
04 -28 -01
33.20
1.25
41.50
04 -30 -01
30.80
1.25
38.50
05 -07 -01
15.80
1.25
19.75
06 -04 -01
33.40
1.25
41.75
06 -18 -01
18.80
1.25
23.50
08 -03 -01
31.80
1.25
39.75
08 -14 -01
34.60
1.25
43.25
08 -21 -01
33.20
1.25
41.50
08 -28 -01
37.20
1.25
46.50
08 -29 -01
40.20
1.25
50.25
09 -17 -01
50.00
1.25
62.50
Unknown
30.60
1.25
38.25
Unknown
33.60
1.25
42.00
Total:
$630.75
Warner 02- 065 -C2
Page 5
1. All of the above amounts are accounted for on adding machine tape
provided by Warner.
2. All of the receipts provided by Warner were from Grubbs.
3. Warner did not provide any receipts from M.T. Can or Six Recycling.
16. Subsequent to April 12, 2002, Warner spoke to Jordan and determined the amount of
scrap metal money that Jordan had given to her.
a. Warner did not have the records or money to be able to determine how much
scrap money Jordan gave to her for calendar year 2001.
b. Jordan told Warner she could have a copy of his receipts and a copy of the list
he maintained.
17. In May 2002, Warner met with Turnley in his office and provided a deposit receipt from
Peoples Home Savings Bank in the amount of $1,370.00.
a. The deposit receipt was dated May 13, 2002.
b. Warner claimed that this deposit to the township general fund consisted of the
scrap metal proceeds.
18. Warner did not deposit money representing scrap metal proceeds into the township
general fund account until after an audit of township accounts determined that there
were no deposits for 2001.
19. Turnley issued a management letter to the township board of supervisors outlining his
findings of the 2001 audit of the financial statements of the township, which included a
section titled "Missing Deposits."
a. Section IV of the management letter, titled "Missing Deposits ", stated the
following:
"During my analytical review of certain revenues for 2001, compared to the
amounts collected for 2000, I noted that funds for the "sale of scrap" were not
shown in the general ledger. Per conversation with the township chairman, I
Warner 02- 065 -C2
Page 6
was informed that monies (cash) were in fact received and given to township
personnel for the sale of scrap for which the chairman produced receipts
totaling approximately $1,364.89. These receipts span the period of April
through August 2001. A deposit of $1,370.00 for these scrap funds was made
on May 13, 2002."
b. Turnley's recommendation regarding Section IV, Missing Deposits, was as
follows:
"The township needs to ensure that all monies received are recorded properly
and deposited promptly in accordance with the language contained in the
Commonwealth of Pennsylvania Borough Code. When deposited promptly the
township not only maximizes investment earnings, but also minimizes the
appearance of impropriety regarding the interim disposition of these funds."
20. Warner was required to annually file Statements of Financial Interests (SFI) in her
capacity as a supervisor, secretary /treasurer, and assistant treasurer for Hanover
Township by May 1 st of each year for the proceeding calendar year.
21. An SFI Compliance Review was conducted at Hanover Township on August 7, 2002.
a. SFIs for calendar years 1999 and 2001 for Warner were not on file at the time
of the audit.
1. Warner was required to file an SFI for calendar year 1999 in her
capacity as secretary /treasurer.
2. Warner was required to file an SFI for calendar year 2001 in her
capacity as supervisor and assistant treasurer.
b. Warner filed an SFI for calendar year 2000 on February 28, 2001.
c. Warner claims to have timely filed her SFIs for calendar years 1999 and 2001,
which she believes were misplaced or stolen from the township records.
22. Warner asserts she never intended to violate the Ethics Law by not making more timely
bank deposits of township scrap monies.
III. DISCUSSION:
At all times relevant to this matter, the Respondent, Eula Lorraine Warner, hereinafter
Warner, has been a public official subject to the provisions of the Public Official and Employee
Ethics Law, Act 9 of 1989, Pamphlet Law 26, 65 P.S. § 401, et se ., as codified by the Public
Official and Employee Ethics Act, Act 93 of 1998, Chapter 11, 6 Pa.C.S. § 1101 et seq.,
which Acts are referred to herein as the "Ethics Act."
The allegations are that Warner, as a Supervisor and Treasurer for Hanover Township,
violated Sections 1103(a) and 1104(a) of the Ethics Act, when she retained monies collected
from scrap collections in her possession; and when she failed to file Statements of Financial
Interests (SFI's) for calendar years 1999 and 2001.
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.
The term "conflict of interest" is defined under Act 9 of 1989/Act 93 of 1998 as follows:
Section 1102. Definitions
Warner 02- 065 -C2
Page 7
"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
f
of ce 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. "Conflict" or
"conflict of interest" 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 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 requires that each public official /public employee
must file a Statement of Financial Interests for the preceding calendar year, each year that he
holds the position and the year after he leaves it.
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.
Warner served as the township secretary /treasurer from January of 1996 through
December of 1999. In January of 2000, Warner became township supervisor. In addition,
from January of 2000 through December of 2002, Warner held various positions of
employment with the township: secretary and treasurer, treasurer, and assistant treasurer.
Warner's duties as treasurer /assistant treasurer required her to make deposits into township
accounts.
One of the sources of income for the township is the sale of scrap metal to a local
salvage yard. Supervisor Jordan routinely took scrap metal and received money which he
turned over to Warner for recordation and deposit in the appropriate township account. In
some instances, the funds were not directly given to Warner or were left in file cabinets.
Beginning in 1999, the township utilized the services of Mark Turnley, CPA, to conduct
yearly audits of the township accounts. Turnley observed that for the years 1999 and 2000
there were records of deposits of scrap metal sale proceeds into a township account but there
were no such records of deposits for scrap metal proceeds in 2001. As a consequence,
Turnley recommended to the township that there be accurate documentation as to the receipt
and deposit of scrap metal proceeds in the township records. Jordan confirmed to Turnley
that the township recycled scrap metal in 2001. Turnley then attempted to contact Warner
who was unavailable, being on vacation in Las Vegas. Jordan provided a list to Turnley
outlining the dates, location and amounts received totaling $1,364.89 for recycling scrap
metal. Fact Finding 11.
Turnley questioned Warner when she returned from vacation. Warner informed
Turnley that she did not deposit the scrap metal proceeds and had the funds in her
possession. On April 12, 2002, Warner provided to Turnley an adding machine tape and
Warner 02- 065 -C2
Page 8
receipts for some but not all of the scrap metal proceeds. Fact Finding 14. Warner provided
receipts totaling $630.75. Fact Finding 15. Subsequently, in May of 2002 Warner informed
Turnley that she deposited $1,370.00 in People's Home Savings Bank in the township's
general fund for the scrap metal proceeds. That deposit was made after the audit of the
township accounts reflected that there were no deposits made in 2001 for scrap metal
proceeds. Turnley issued a management letter to the supervisors concerning "missing
deposits," wherein he recommended that the township ensure recordation and prompt deposit
of monies. Fact Finding 19.
In an SFI compliance review conducted in Hanover Township in August of 2002, it was
learned that no SFI's were on file for Warner for the calendar years 1999 and 2001. Warner
asserts that she filed the SFI's for the calendar years 1999 and 2001 which were either
misplaced or stolen from the township records.
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: an
unintentional violation of Section 1103(a) of the Ethics Act when Warner did not timely deposit
scrap metal funds into township accounts; and violations by Warner of Section 1104(a) when
SFI's for the 1999 and 2001 calendar years were not on file with the township at the time of
the compliance review. In addition, Warner agrees to make payment in the amount of $250.00
to the Commonwealth of Pennsylvania and forwarded to this Commission within thirty (30)
days of the issuance of the final adjudication in this matter. Finally, Warner agrees to file
complete and accurate SFI's for calendar years 1999 and 2001.
In applying 1103(a) of the Ethics Act to the allegation regarding the retention of the
monies collected from the scrap metal sales, there were uses of authority of office on the part
of Warner. But for the fact that Warner was treasurer /assistant treasurer with the
responsibility for making deposits into township accounts, she would not have been in a
position to hold rather than deposit such monies into a township account. Through the uses of
authority of her office, Warner obtained a private pecuniary benefit consisting of the holding of
scrap metal proceeds. Lastly, that private pecuniary benefit inured to her. Accordingly, unintentionally violated Section 1103(a) of the Ethics Act when she did not timely
deposit scrap metal funds into township accounts. Schlanger, Order 1257.
Regarding the SFI's, the record reflects that Warner's SFI's were not on file for the
calendar years 1999 and 2001. Accordingly, Warner violated Section 1104(a) of the Ethics
Act when her SFI' s for calendar years 1999 and 2001 were not on file with the township at the
time of the compliance review.
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, Warner is directed to make payment
in the amount of $250.00 to the Commonwealth of Pennsylvania and forwarded to this
Commission within 30 days of the issuance of the this order. Warner must file complete and
accurate Statements of Financial Interests for calendar years 1999 and 2001 within 30 days
of the issuance of this order. Copies of the SFI's must be filed with this Commission for
compliance verification purposes. Compliance with the foregoing will result in the closing of
this case with no further action by this Commission. Noncompliance will result in the
institution of an order enforcement action.
IV. CONCLUSIONS OF LAW:
1. Warner, as a supervisor /treasurer for Hanover Township, is a public official/ employee
subject to the provisions of Act 9 of 1989 as codified by Act 93 of 1998.
Warner 02- 065 -C2
Page 9
2. Warner unintentionally violated Section 1103(a) of the Ethics Act when she did not
timely deposit scrap metal funds into township accounts.
3. Warner violated Section 1104(a) of the Ethics Act when her SFI' s for calendar years
1999 and 2001 were not on file with the township at the time of a compliance review.
In Re: Eula Lorraine Warner
ORDER NO. 1305
File Docket: 02- 065 -C2
Date Decided: 12/1/03
Date Mailed: 12/15/03
1. Warner, as a supervisor /treasurer for Hanover Township, unintentionally violated
Section 1103(a) of the Ethics Act when she did not timely deposit scrap metal funds
into township accounts.
2. Warner violated Section 1104(a) of the Ethics Act when her Statement of Financial
Interests for calendar years 1999 and 2001 were not on file with the township at the
time of a compliance review.
3. Per the Consent Agreement of the parties, Warner is directed to make payment in the
amount of $250.00 to the Commonwealth of Pennsylvania and forwarded to this
Commission within thirty (30) days of the issuance of the final adjudication in this
matter.
4. Warner is directed to file complete and accurate Statements of Financial Interests for
calendar years 1999 and 2001, with copies filed with this Commission for compliance
verification purposes.
5. Compliance with the paragraphs 3 and 4 will result in the closing of this case with no
further action by this Commission. Non - compliance will result in the institution of an
order enforcement action.
BY THE COMMISSION,
Louis W. Fryman, Chair