MOUNT VERNON — McDaniel CPA notified Mount Vernon city officials Monday morning that it is resigning from its payroll agreement with the city.
In the resignation letter, CPA Rene McDaniel cited a lack of confidence that payroll will be finalized in a timely manner going forward or that necessary information will be provided.
The letter states the firm has “encountered roadblocks every step of the way” from the city auditor’s office. It also states that auditor staff “have not been forthcoming with information needed to process payroll correctly and have then accused our office of making mistakes.”
McDaniel alleges her firm has “repeatedly been given faulty and misleading information while crucial items have been and continue to be withheld.”
“This gives the impression that we are deliberately being sabotaged, which unnecessarily endangers our firm’s respectable reputation.”
McDaniel wrote it is impossible to process payroll correctly when the auditor’s office is unwilling to provide information on how to use the current software and the “intricate peculiarities” of processing the city payroll.
Additionally, she noted that her firm became aware of prior payroll mistakes regarding software setup and time sheet discrepancies, as well as inconsistencies with labor law, it notified the city’s human resources department.
Reached for comment at 3:30 p.m. Monday, City Auditor Terry Scott said he had not yet seen the letter.
“Without knowing what information they were referring to, I could not comment,” he said.
However, Scott said he returned from a meeting at McDaniel’s office about 20 minutes prior, and CPA staff were continuing to work on payroll.
“We did some narrative work on some questions that they had,” he said.
A message left with McDaniel seeking clarification was not returned by the time of publication.
Background
In June, Mount Vernon City Council voted to use $161,000 from its rainy day fund for payroll services.
The administration earmarked $83,000 to purchase NEOGOV software for the auditor’s office and $3,000 for two more computers. The remaining $75,000 was for McDaniel CPA to temporarily process payroll.
According to McDaniel, a special July 15 Mount Vernon City Council meeting determined that McDaniel CPA would verify, enter, and balance payroll. The firm would then notify the auditor’s office that payroll was ready to be finalized for direct deposit.
The auditor’s office was to finalize payroll, direct deposit, and print checks.
During the meeting, Scott noted the difficulties associated with processing police and fire payroll. He said many things can lead to errors and acknowledged that his office has made errors.
Council had the meeting because of what Councilwoman Janis Seavolt characterized as miscommunication. McDaniel said requiring the agreement was a result of Scott’s unwillingness to share necessary information about the payroll process.
Councilman Mel Severns said he saw it as a compliance issue that Scott’s office did not share the information and software needed to help McDaniel’s firm process payroll.
Where does the city go from here?
Salyers said that in outsourcing payroll, the city recognized Scott’s office was overworked and understaffed.
The goal was to have McDaniel’s staff help implement NEOGOV, process payroll, and turn a streamlined product back to the city in December.
Salyers said the auditor’s office did not comply or cooperate with McDaniel’s staff.
“For the course of the brief time with Rene and her team, they did phenomenal work. We are disappointed they had this experience with the auditor’s office,” he said.
“They found a significant amount of discrepancies and issues that we will have to work with legal counsel on.”
Salyers said the administration already knew many of the issues through an internal review, working with the labor law firm Zashin & Rich, Clemans Nelson, and FSLA (Fair Standards Labor Act) rules.
“We’ve just had firm after firm tell us things are incorrect,” he said. “Once they brought it to our attention, we said, ‘We have to do something about this.’”
Under the Ohio Revised Code, Salyers said state law does not require the auditor’s office to do payroll.
He has reached out to the state auditor’s office for guidance and Zashin & Rich for a legal opinion.
Salyers anticipates an outside firm working on payroll moving forward. He also expects a forensic audit looking back at least three years.
“We are confident that the issues that precipitated this have not been fully resolved,” he said. “Because of that, we are not comfortable with giving the duties back to the auditor’s office as is.
“The information found has not been adequately resolved, and we have a moral obligation to fix it.”
