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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 Effective December 15, 1998, Act 9 of 1989 was repealed and replaced by Chapter 11 of Act 93 of 1998, 65 Pa.C.S. § 1101 et seq., which essentially repeats Act 9 of 1989 and provides for the completion of pending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