Live Oak Public Libraries slammed in new forensic financial audi - WTOC-TV: Savannah, Beaufort, SC, News, Weather & Sports

Live Oak Public Libraries slammed in new forensic financial audit

(Source: WTOC) (Source: WTOC)
(Source: WTOC) (Source: WTOC)

Bad payroll processing, poor accounting, and commingling of donations and library money are all issues raised in a new forensic audit of Chatham, Effingham, and Liberty County public libraries.

The first part of that report focuses on the human resource department’s payment processes. The audit highlights poor management of employee files, poor implementation of benefits, and a general lack of accountability. These payment issues follow the previous report that called the department and its leaders “unprofessional and unethical.”

One of the worst mistakes—the payroll processor, Scott Pool, paid an outgoing employee almost a million dollars instead of $15,000. They also overpaid the outgoing director $1,200. The worst—and possibly most shocking allegation—the library used shredded personal employee documents as stuffing in gift baskets. Employees said they got paid late, paid incorrect amounts, and sometimes even paid twice.

“These are not the things we want to see in our libraries. We hold a position of trust in every community across Georgia. I expect library staff members, and particularly, human resources departments, to perform at a very high level,” said State Librarian Julie Walker.

Walker is the State Librarian.

“This is highly unusual. I have never run into anything equal to this in my library career,” said Walker.

The second part of the audit focuses on the general accounting of the library. Specifically, it said the Finance Director, Neal Vickers, misrepresented the financial state of the library system at a meeting and told auditors, "the Board of Trustees were not interested in that much detail."

Even worse—when asked why all the library funds from Chatham, Effingham, and Liberty counties were all together—he told auditors, “The library was really Chatham County's Library and the other Counties' we're just glad to be allowed to participate.”

But when you look deeper, Chatham County needs these other counties.

The audit said Vickers "...combines all activities for General, Effingham County, Liberty County, Chatham County, and State Funds into one column. This report reflects a surplus of $248,466."

The report goes on: "This is misleading because as of March 31, 2016, Chatham County was incurring a loss of $179,000."

Auditors also said Vickers wanted to borrow money from the Library Foundation group—something strictly prohibited. Further, the audit cites two other poor accounting decisions that Vickers should know not to do.

Walker says handling the money—public money specifically—is the most important thing for public trust.

“They have to be able to trust that that's being handled appropriately and accurately,” said Walker.

The third part of the audit focuses on the fundraising arm of the libraries. It says previous director "Christy Divine had many sole responsibilities and very little supervision."

Auditors said she mishandled donations of $84,000 and $25,000.

You can read the full agreed upon procedures following the forensic financial audit below:

The last issue in the audit—Divine’s spending of the Foundation money. The bylaw says 100 percent of the money should go towards benefitting the library. In 2015, the Foundation reported spending more than $300,000 but only $10,000 of that went towards books and equipment. Special events, fundraising, and administration ate up the rest. In 2016, more than $400,000 were spent—only 10 percent of that benefitted the library.

The board is now facing tough decisions regarding the financial management and HR departments. Walker says the board must not let conflicts of interest impede their actions.

“In order to maintain any level of public trust, they've got to respond to the findings here appropriately,” said Walker.

Christy Divine and Jim Stroud, two people prominently mentioned in the reports have ties to the board. Stroud’s cousin is Savannah-Chatham County Public School System superintendent and board member, Dr. Thomas Lockamy. Christy’s husband, Edward, is on the board. Both of them are newly appointed members. That special called meeting to discuss these audits will be Tuesday night at 5:30.

Walker said the state will not take over the system. They can, however, withdraw state funding. The state currently provides $850,000 to the library—10 percent of its budget.

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