AMBRIDGE - With its employee pension funds riddled with errors, late grant applications and other problems plaguing town finances, Ambridge Council is considering filing an insurance claim for alleged fiscal neglect by former Manager Pam Caskie.
Council voted unanimously Tuesday night to authorize current Manager Kristen Denne and solicitor Rick Start to begin investigating whether it can file a claim to recoup some of its losses. Denne said the borough has a liability bond on employees who handle money, a sort of insurance policy against financial mismanagement.
Borough officials are hoping for some insurance compensation, but Denne cautioned that they are just starting their investigation. Denne said she couldn't estimate how much money the borough has lost and added that criminal charges or private lawsuits are not being considered.
"It's in the very premature stages," Denne said. "The burden of proving mismanagement lies with the borough, so I don't even know if a bond claim is a possibility."
A recent audit by Ambridge certified public accountant Mark C. Turnley showed that the borough had missed deadlines to apply for state road and federal police grants, causing a significant decrease in cash flow.
The audit also showed that money from the Federal Emergency Management Agency for repairs to Hazel Avenue, which was damaged in the flooding from the aftermath of Hurricane Ivan, went toward general expenses. The borough received $94,000 from FEMA and spent about $17,000 on engineering for the repairs, but the repairs have not yet been made, Denne said.
A state audit of the borough's pension plans, which was released in late September, showed 18 "findings of fault," including failure to deposit $119,366 in state aid in 2004 and late deposits of $116,045 and $121,565 of state aid in 2002 and 2003. It also listed late payments of about $206,000 of "minimum municipal obligation," or the amount a borough must contribute to the plans yearly, between 2001 and 2003. The borough has since made the deposits, but it still has to pay interest on the amounts.
Council President David Deiter, who made the motion to begin investigations, said he was shocked by what the audits revealed and wanted Caskie's financial management probed.
"With the FEMA money, for instance, I was waiting for the project to start, and here I had no idea the money was already in our checking account," Deiter said. "Anywhere we can find misuse, we hope to recoup those losses."
Councilman Gerald "Duke" McCoy, who had long been a vocal opponent of Caskie, said that while he hopes the borough can file a claim, he is disappointed the borough finances weren't investigated sooner.
Denne said the borough usually does an audit yearly, but this year Councilman Tony Cafarelli had requested a cash-flow audit before the year end.
Deiter said such financial problems caught all council members by surprise because they had assumed the former manager was paying bills and applying for grants as directed by council.
This is cache, read story here
