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Township trustee and fire employees owe taxpayers $351K, audit reveals

Posted at 4:46 PM, Jun 23, 2022
and last updated 2022-06-23 17:22:54-04

INDIANAPOLIS — Salaries, meals, retirement gifts, rental cars, flights for wives to attend a conference, and entertainment.

These are just some of the $239,397 in expenses racked up by a nonprofit using Wayne Township taxpayer money, according to an Indiana State Board of Accounts audit released Thursday.

Wayne Township Fire Department Inc. is a tax-exempt 501c3 nonprofit corporation founded in 1954.

Former fire chief Randy Adams, current trustee Chuck Jones, and fire mechanic James Parham are listed as directors for the nonprofit, current fire chief Mike Lang is the president and Tim Smith is the secretary, according to the 990 filed in 2020.

They must repay $351,505 to the taxpayers, according to the audit.

The township entered into service agreements with the nonprofit for 2019, 2020, and 2021 without proper approval from township officials, according to the audit.

Adams signed the agreements on behalf of the township, and auditors couldn’t find any documentation showing current trustee Jones signed off on the agreements.

The agreements said the nonprofit was supposed to provide financial support to the Wayne Township Fire Department, however, auditors found the opposite-- taxpayer money intended for the fire department was funneled into the nonprofit.

The audit released Thursday follows a September 2021 investigation that raised questions about the trustee, fire chief and former fire chief using the nonprofit to pay themselves additional salaries with little oversight.

From 2019 to September 2021, the nonprofit had a total of $361,858 in expenses.

However, state auditors determined $239,397.37 of the expenses were not allowable under the agreement including salaries paid to the five nonprofit board members, meals, entertainment expenses incurred when township/nonprofit employees traveled to Georgia and Las Vegas for training, and flights purchased for two wives to attend a conference with their husbands.

The nonprofit did not have enough money to cover expenses, so they used taxpayer money, the audit read.

Jones, Adams, Lang, Parham and nonprofit board secretary Tim Smith must repay $351,505 to the taxpayers, according to the audit.

Included in that total, SBOA requested Jones, Adams, Lang, Parham, and Smith to reimburse the township a total of $30,980 for unallowable expenses.

Records show Jones, Adams, Lang, and Parham were each nonprofit board members and township employees/officials and from 2019-2021, they each were paid $37,500 from the nonprofit.

In the audit, SBOA asked each of them to repay taxpayers the $37,500 for those salaries.

State auditors also want Jones and Adams to reimburse taxpayers $41,384 for special investigation costs racked up by the Indiana State Board of Accounts.

For example, auditors found the township had a contract with a medical company for its health clinic.

The medical company determined it had overbilled the Township for the 2019 contract and the company issued a $41,000 check to WTFD with Refund of Over payment 2019 in the memo line of the check.

Auditors found instead of depositing the money into the township’s coffers, the check was deposited into the nonprofit’s bank account even though the nonprofit did not pay for any expenses for the health clinic.

SBOA also noted the following internal controls deficiencies:

  • Internal controls were not in place to ensure that Township service contracts were properly approved.
  • Internal controls were not in place to detect that expenses exceeded appropriations for the agreements with the Fire Corporation.
  • Internal controls were not in place to monitor that the Township funds were spent according to the service agreements.
  • Internal controls were not in place to verify there was supporting documentation for all.

WRTV Investigates is working to get statements from the township and fire department, as well as Jones, Adams and Lang.

"We are fully cooperating to make sure no mistakes are made," said Robert Hammerle, attorney for fire chief Mike Lang.

On May 20, Marion County prosecutors charged Jones, Lang, Adams and Parham with Conflict of Interest, a felony.

They are scheduled for a change of plea hearing on June 27.

It’s not yet clear how this audit will impact the criminal case against them.

All four pleaded guilty to the conflict of interest charge as part of a plea agreement and will not serve any jail time.

Jones released a statement last month about the criminal charges.

"I am writing to address my recent legal concerns and reinforce my deep respect and admiration for our community. I am disappointed to share that I recently had a conflict of interest that may have affected my tenure as Wayne Township Trustee. I would like to take this opportunity to apologize to my employees, the citizens of Wayne Township, and the rest of my community. I solemnly regret my actions that created this conflict of interest and I have taken full responsibility for my lack of discretion. I pray that our community will heal and continue to blossom as I take steps to remedy this unfortunate situation.

On advice of my attorney, I may not share any further details at this time. However, I plan to be as transparent with you as possible and will relay more information as soon as I am able."

Prosecutors allege between December 20, 2019 and May 19, 2021, they "knowingly or intentionally" profited from contracts between the nonprofit, Wayne Township Fire Department, Inc, and the fire department.

Jones, Lang and Adams all reached plea agreements in which they each agreed to plead guilty to conflict of interest and pay Wayne Township $31,939 in restitution for a total of $95,817.

They can get the Conflict of Interest charges expunged after one year from the date of sentencing and after paying full restitution, read the plea agreement.

Parham signed a plea agreement as well and agreed to be placed on nonreporting probation for 363 days and pay Wayne Township $1,200 in restitution over 12 months.

He can get the Conflict of Interest charges expunged after one year from the date of sentencing and after paying full restitution, read the plea agreement.

As WRTV reported in 2021, township officials have been receiving compensation through the nonprofit, which is funded through donations and taxpayer money.

The board members’ nonprofit compensation is even more concerning considering Lang and Adams have already taken heat over their fire department administration pay.

PREVIOUS | Wayne Township Fire Department administrators take heat over overtime pay | New fire chief pledges changes to payroll

WRTV Investigates found the current and former fire chiefs, as well as the township trustee, used the nonprofit to pay themselves on top of their six-figure government salaries.

As WRTV reported in June 2021, Lang got paid a total of $151,766 in 2020 as a deputy chief at the fire department including $14,445 in overtime.

As fire chief, Adams got paid $190,345 in 2020 including $41,860 in overtime.

Randy Adams

Records obtained by WRTV Investigates showed Adams and his administration charged taxpayers overtime for travel to inspect fire trucks and to attend meetings at the administration building.

Adams claimed 49 hours of overtime for a trip to South Dakota, records show.

WRTV: “Did that include sleeping?”
Adams: “Anytime we were gone, yes.”
WRTV: “So, you counted sleeping, eating, driving from the time you left to the time you got back?”
Adams: “If it was outside normal business hours.”
WRTV: “So you weren’t counting 8 am to 4 while you were there, but everything else you were counting?”
Adams: “Yes.”
WRTV: “Some taxpayers might say why charge overtime to go look at fire trucks?
Adams: “It's outside the normal working hours. Everyone should be fairly compensated. Everyone who went on the trip was fairly compensated.”
WRTV: “Some will say, you're already making six figures. Why do you need to charge overtime on top of that?”
Adams: “It's the way the system is set up right now. We aren't salary-exempt. We are eligible to get the overtime."

On top of their government salaries and overtime, they also received $17,500 salaries from the nonprofit—some call this “triple dipping.”

As township trustee, Jones received $105,504 in compensation in 2020 for his elected position.

Chuck Jones

WRTV Investigates’ findings were concerning to several City-County Councilors who represent Wayne Township, including Councilman Jared Evans, D-District 22.

“It doesn’t sit well,” Evans said in September 2021. "It's concerning. We've been hearing concerns from individuals about the stories that have been coming out."

Most of Evans’ district is Wayne Township, and he’s concerned about how his constituents’ tax dollars were spent.

"It doesn't seem right,” Evans said in 2021. “I've never heard about a board of directors at a small nonprofit taking that sort of income. Especially when you consider they were already getting taxpayer-funded incomes."

Adams retired in May 2021, but the councilor says the current chief, Lang, needs to go.

“We need some new leadership at the fire department,” Evans said. “We’ve got a history here of things that have been going on. We really need to look at cleaning house and looking inward and how we can really build that trust not only with the citizens but also with those firefighters that are being impacted.”

The Wayne Township Fire Department Inc.’s tax returns filed in 2021 are still not publicly available yet.

Many of the records WRTV Investigates requested were not provided because nonprofits do not have to follow the Indiana Access to Public Records Act.

Evans said steps need to be taken to prevent a similar circumstance from happening again.

“A lot of good things come out of audits, including what can we do better to make sure we are building trust and to ensure these sort of things don't continue to happen again,” Evans said.

In September 2021, the Wayne Township Board voted to approve an ordinance that says salaried fire department employees can no longer receive overtime—including the fire chief, assistant chief, division chief, and executive administrator.

PREVIOUS | Wayne Twp changes overtime rules for fire administration | Fire administrators can no longer get OT under new ordinance

Among the changes—administrative overtime will now require prior approval by the fire chief and the trustee.

Salaried fire department employees will be able to earn flex time-off, but they can’t get paid for it, according to the ordinance.

Hourly firefighters will continue to be eligible for overtime, per the policy.

State Rep. Renee Pack (D-Indianapolis) issued the following statement regarding the charges:

“Trust and integrity are the bedrock of all functioning government organizations, and it’s far past time to restore that in the Westside of Indianapolis,” Pack said. “The charges filed are a good first step in Wayne Township healing from bad actors abusing their power. It’s important to denounce anyone that takes advantage of the public's trust regardless of political affiliation. It’s a good day to see justice in action.”

Democratic nominee for Wayne Township Trustee Jeb Bardon released the following statement:

“I am extremely saddened by today's news. As a lifelong Wayne Township resident, business owner, and taxpayer, I know our community deserves so much better. It’s now time for a fresh start in Wayne Township. Trust must be restored. Transparency must be improved. And a high level of financial accountability must be put in place. If elected Wayne Township Trustee, that’s exactly what I intend to do. This can never happen again."

PREVIOUS | New fire chief pledges changes to payroll

Mike Lang

Fire Chief Mike Lang provided the following response to WRTV in September 2021:

"We have discussed dissolving the nonprofit in the past. Throughout the previous twenty-one years, each board member, trustee, and fire chief have been able to see the good that is accomplished through the utilization of Wayne Township Fire Department, Inc. Unfortunately, the actions and ideas from Chief Adams will tarnish the many years of community support that was accomplished. I am not familiar with Indy Public Safety Foundation, but I am not opposed to utilizing them if they are an appropriate alternative.

Trustee Jones spoke many times throughout his campaign and since being elected, that he was not a firefighter and would allow the fire chief to run the fire department. While I was certainly in Chief Adams' administration, he made decisions that were outside of my recommendations. Ultimately, Chief Adams had ideas and made decisions that he is not readily available to explain. Since my appointment as fire chief, my administration and I have been working to prevent the issues that have been raised. We immediately changed the overtime interpretation to prevent much of the previous overtime. We have worked with the union representatives to change the language in the labor management agreement that allows administrators to preschedule overtime. The new Labor/Management Agreement should be completed for presentation at the next Township Board Meeting. The nonprofit board has agreed that the concept of a volunteer ambulance service is not practical and Chief Adams' idea was immediately stopped. The use of the non-profit corporation will only be used for donations, grants, and special projects, if it is kept as an active partnership. If kept, I will ask a township board member to be the fire chief designee for additional oversight. I will ask the non-profit board to set up a meeting with the Indy Public Safety Foundation to determine if they would be a better option.

My thoughts would be that Trustee Jones unfortunately was placed into defending actions and decisions that he did not understand or know were being made by his appointed fire chief. The changes that the councilors and/or public believe that Wayne Township needs, took place on May 21st. I serve at the pleasure of Trustee Jones. As long as I am the fire chief, we will work regain the trust of the elected officials and public that we are honored to serve."

You can read full statements from Lang and Trustee Jones on the nonprofit here.