Financial missteps gut state revenue in Webberville 

MONDAY, Feb. 17 — Nearly $650,000 in state road repair funding and revenue sharing payments are being withheld from the village of Webberville after its officials repeatedly failed to submit annual audits, among other financial missteps. 

And despite a damning list of organizational problems cited by state auditors in a recent financial report, village officials, including Mayor Brad Hitchcock, are keeping tight-lipped about their ongoing troubles with the state. Hitchcock, Clerk Jaymee Hord and two of four village trustees haven’t returned several calls from City Pulse. 

Mayor Pro-Tem Rusty Ackerman declined to comment. Trustee Jim Greene said any reports of financial problems in the village of Webberville are “fake news” and refused to answer further questions on the topic. City Pulse, as a result, was forced to piece together the village’s financial outlook almost entirely from public records. 

Among the issues: Village audits haven’t been submitted to the state in a timely manner — if at all — for several years. As a result, the state has been largely left in the dark on Webberville’s finances. Reports state some records couldn’t be produced at all. Some accounts had incorrect figures. And village officials may have broken the law. 

“Like we offer all communities statewide, the Michigan Department of Treasury is actively working with the village of Webberville to problem-solve the long-withstanding financial and operational issues facing the community,” according to a statement from Ron Leix, a spokesman with the state’s Department of Treasury. 

Records show village officials were five months late filing an annual audit in 2012 and 10  months late in 2013. Filings from 2014 were a full year behind. Audits from 2015 and 2016 were filed nearly three years too late. And filings from the last three years — including 2019 — hadn’t been submitted at all. 

As a result, $544,000 is being withheld by the Michigan Transportation Fund — cash that can fund local road repairs — and $97,000 is being withheld in state revenue sharing payments this year. And that cash will be held hostage until village officials correct a massive list of operational deficiencies found in a recent audit. 

“Once they submit the required paperwork and debt elimination plan, we can release the funds,” he added. 

State audit reports show that village expenditures routinely exceeded the amount authorized in annual budgets. Trustees had also failed to approve each disbursement prior to payment as required by law, records show. Public budget hearings also weren’t held in accordance with state laws designed to bolster governmental transparency. 

“The lack of documentation and errors in depositing led to an incomplete general ledger and inaccurate cash balances and revenues in all funds,” state auditors found, noting a lack of oversight had contributed to the issue. 

Additionally, “illegal or unauthorized” expenditures were found in village records, auditors found, noting that about 52% of invoices tested from 2016 were missing administrative approval. Numerous payroll records were not maintained. State unemployment forms were not completed. And there was an “uncharacteristically high” amount of voided checks issued from the village checkbook, which had also not been kept in a secure location. 

Auditors also cited the village for its failure to consistently pay employee health insurance premiums. Some payments were up to two months late, indicating that employees may not have had consistent health coverage. Additionally, officials were unable to produce meeting minutes to show how village business was conducted. 

Several village credit card transactions were also missing receipts. Taxes captured by the village’s Downtown Development Authority hadn’t been remitted to the DDA for at least three years. Revenues were improperly recorded and there was a 29-month period where the DDA hadn’t paid to operate streetlights, auditors found. 

Auditors also maintained that several payments issued by the village to cover the utility bills at a local food bank had been done so illegally. Taxpayer dollars could not be used to support those charitable efforts, auditors said. 

The combined $641,000 in withheld state funding accounts for a massive portion of Webberville’s budget. Without correction, it could surely jeopardize services for the village’s 1,300 residents. A budget listed on the village website from 2015 — the most recent listing — shows an annual revenue of only about $1 million. 

The withheld state funding also surpasses the amount the village raises from property taxes during a typical year. And according to budget records, the withheld funds could support the entire village payroll 13 times over. 

Hord — like most village officials — didn’t return calls for this story. But in correspondence between the village and the state, she insisted the village’s financial problems were tied exclusively to an understaffed office and noted that outstanding problems would be corrected after new organizational policies were put into place. 

“The village of Webberville’s records were not organized well; therefore when auditors asked for certain documents, village staff was not able to find them in a timely manner or, at times, provide them at all,” Hord told state officials. “This was caused due to a lack of staff during great periods of time in 2014 through 2018.” 

“Two full-time staff has since been hired. This has allowed for the office to begin catching up on filing and organizing six years worth of understaffing. There is not one person doing all of the work in the village anymore,” Hord continued. “Just these steps will cause the next audit to not be adverse or disclaimed.” 

Hord said inaccurate records will be fixed, also noting that future public notices for public meetings will be published in an Ingham County newspaper to align with state law. She also said the village checkbook will now be stored in a locked safe. As for payments to the food bank? The village attorney is looking into the issue. 

“We have never got dinged for this before,” Hord explained in a letter to the Department of Treasury.  

Leix said Webberville isn’t on a strict deadline to correct its mistakes, noting that the funding will be released once the required paperwork — including a corrective action plan — is filed with the state. Although able to do so, Leix said his department has not yet referred any noncompliance issues to the state attorney general’s office. 

“We’re actively working with the village of Webberville,” Leix said. “From time to time, there are local units that may have revenue sharing held for a few years. Once they get their paperwork submitted, the funds are released.” 

Check back for continued coverage as the village works to resolve its financial issues with the state.