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Audit: Liberty Township trustee must return $15,000

Posted at 12:41 PM, Oct 14, 2016

HENRY COUNTY, Ind. -- A current township trustee has to pay $15,279.88 back to the taxpayers, according to an audit just released by the Indiana State Board of Accounts, the state agency that audits local government.

Liberty Township Trustee Phyllis Shafer paid herself excess salaries in 2013, 2014, 2015, according to the audit.

She and the township clerk, John Shafer, also received reimbursements for supplies and services without the proper documentation including computer ink, stamps, tree removal, and cemetery repair.

“No evidence was provided to support the validity of these payments,” according to the audit.

Paul Joyce, state examiner for the State Board of Accounts, said current law allows for township officials to be married to each other, such as a township trustee and township clerk.

The township also racked up $1,365.34 in penalties and interest from the Internal Revenue Service because claims and taxes were not submitted on time.

The audit also pointed out that the trustee served as the township executive and the township fiscal officer, and was responsible for all aspects of the township’s financial activity.

“As a result, there was no oversight of Township financial activity on an ongoing basis by another individual,” read the audit. “Due to this lack of segregation of duties, fraudulent payments and improper recordkeeping were able to occur and not be identified timely.”

State auditors spent so much time looking for records, they racked up $2,707 in additional investigation costs they’re also asking Phyllis Shafer to repay.

When contacted by Call 6 Investigates Phyllis Shafer asked if the audit would be on the news, but did not provide any further comment.

Call 6 Investigates was unable to reach John Shafer and members of the township board, including the president, for comment Friday morning.

The audit covered January 1, 2013 and December 31, 2015.

Phyllis Shafer has been in office since at least January 1, 2011, records show.

The audit report was forwarded to the Henry County prosecutor who can decide whether to pursue criminal charges.

Shafer must pay $15,279.88 in salary overpayments and other misappropriated funds, according to the Indiana State Board of Accounts.

Phyllis Shafer did return $1,360 by personal check on March 19, 2015, records show.