Island Lake fires finance director after misappropriation of police pension dollars
ISLAND LAKE – The finance director who oversaw the misappropriation of nearly $400,000 in police pension funds was fired by the Island Lake Village Board Thursday evening.
The decision came after a presentation from the village's new auditing firm on its findings, including the amounts of money that were intended for the police pension fund but were instead spent on other village expenses.
The presentation didn't give any new information on the three-year misappropriation beyond updated numbers, but the Village Board wanted to have an official report before it made any employment decisions, said Village President Charles Amrich, who broke the Village Board's tie.
Trustees Mark Beeson, Tony Sciarrone and Keith Johns voted in favor of terminating Finance Director John Little's employment. Trustees Shannon Fox, Thea Morris and Chuck Cermak voted against it.
"I'm sorry it happened to him," Cermak said. "I think he's a nice guy. I know he's done everything I asked from him."
Little used the funds to pay village expenses, including more than $117,500 in legal fees in April 2013, according to the auditing firm, George Roach Associates.
Those bills had to be paid so Little did what he had to do, Cermak said, adding he didn't think it was something Little should have been fired over.
While Cermak believes that Little didn't inform anyone of his decision to divert the funds; Amrich said he thinks members of past village boards knew. The village is not investigating that though, Amrich said.
Little's firing is effective immediately, and the village will not be pursuing any further action against him, he said.
The village's treasurer, Ed McGinty, an Island Lake resident who was appointed shortly after the misappropriation became public, will be made a full-time employee and will assume Little's duties, according to an email from Village Clerk Teresa Ponio and attorney David McArdle.
McGinty has a master's degree in finance from the Keller Graduate School of Management. He also is a former candidate for village trustee.
While the village doesn't have the funds to repay the police pension fund in full, the board discussed transferring $50,000 in impact fees to the fund before the fiscal year ends April 30, Amrich said. Future allocations are being hammered out as part of the budget process.
Any final decision would require board approval.
The audit report also identified deficiencies with the village's financial controls, in particular poor segregation of duties and cash management, according to a letter from the auditing firm.
For example, the same person prepared the payroll, reviewed and approved payroll, prepared journal entries and reconciled the bank account, the letter said.
The letter recommended the board weigh the benefits of having more eyes on the financial documents with the costs that change would bring. It also noted that no monthly treasurer reports were submitted to the Village Board for review, and payroll timesheets were not always approved by the proper personnel.
Some changes designed to address these concerns will be implemented immediately, including reconciling bank accounts in a more timely manner and breaking up some of the financial responsibilities so that the same person isn't doing the work and also reviewing it, Amrich said.