Written by The Fertile Ground
For 40 years, a dangerous culture has taken root in Marion’s city government. It is a culture of convenience and concealment over security, where globally accepted IT and financial practices are not just ignored, but actively disregarded. This isn’t a slow, passive decay; it is a systemic rot evidenced by shocking eyewitness accounts and official reports.
State auditors, as early as 1983, flagged a hazardous mindset where user passwords for sensitive IT systems were shared or non-existent among staff “due to convenience and lack of security awareness”—a practice that makes accountability impossible.
This culture of carelessness has manifested in other stunning ways. Eyewitnesses told Marion Watch of administrative access to critical systems, permissions wars, and password sharing that we now know dated back decades. More recently in 2025, this dysfunction included a “rogue laptop” issued to a city treasurer—a device on the city network known to IT staff but not the mayor—and a breathtaking breach of security: the treasurer using the critical server room as an office. This “server room office” issue was only stopped when Mayor Bill Collins took office.
Furthermore, Marion Watch has obtained screenshots from a public source showing a former Marion City Deputy Auditor retaining inappropriate, high-level access to all Marion City financial systems via the New World software after leaving office. These screenshots from 2021, which will be released at a later time, are further evidence of a highly dysfunctional IT infrastructure that disregards globally accepted policies and laws meant to safeguard taxpayer funds. This discovery also confirms the “permissions wars” that citizens have long talked about, but lacked evidence to fully prove.
The next several reports, including this one, will detail these severe breaches of IT and financial controls. We will lay bare the reasons why the IT, financial, law enforcement, legal, and other experts on the Marion Watch team are insisting on a full forensic IT audit of all city financial and communications systems, dating back as far as possible—preferably to the installation of the New World Software. This is considered a non-negotiable measure when issues this extenssive are found.
Microfilm audit reports from 1983/1984 showing severe information technology & financial control issues.
Ohio archives, ohio auditor of state
Microfilm audit reports from 1997/1998 showing severe information technology control issues.
Ohio archives, ohio auditor of state
This rot was not new. Official state audits, unearthed by Marion Watch from microfilm archives, prove this negligence is a multi-decade institutional feature.
The 1983 Warning: A Failure of Basic Controls
An audit from 1983 revealed an environment ripe for fraud. The core problem was a complete failure to segregate financial duties.
- In the Sewer Department: “All employees” could prepare bills, collect cash, access the register, and—most critically—make adjustments to customer accounts without approval.
- In the Municipal Court: A single employee was a one-person shop of risk, responsible for collecting all revenue, writing checks, signing checks, and reconciling the bank statements.
The audit warned this created an “opportunity to conceal irregularities.” The city was also paying bills from photocopies or no invoice at all and couldn’t even produce a list of its own assets, leaving them uninsured and untracked.
To see the full list of issues from the 1983 era click below:
CLICK FOR FULL 1983 ASSESSMENT
Financial Issues
The audit identified numerous financial issues rooted in a failure to follow standard accounting practices and state law.
Accounting Basis and Reporting
- Non-GAAP Accounting: The city prepared its financial statements on a cash receipts and disbursements basis, not in conformity with Generally Accepted Accounting Principles (GAAP). This meant general fixed assets and long-term debt were not recorded on the financial statements.
- Unrecorded Liabilities: Significant financial obligations were not recorded, including an estimated $3,476,862 in accumulated sick leave and $525,784 in vacation leave.
- Off-Balance-Sheet Funds: Several funds were not reflected in the city’s financial statements, including $545,844 held by trustees for hospital bond redemption and $289,732 in a deferred compensation program.
Budgetary Control Failures
- Unlawful Spending: Expenditures exceeded legal appropriations in multiple funds, including the Senior Citizen Fund, Federal Revenue Sharing Fund, and Garbage Fund. Spending Federal Revenue Sharing funds in excess of appropriations was also a violation of federal regulations.
- Void Contracts: The city made contracts and ordered expenditures without the fiscal officer’s prior certification that funds were available, a violation of state law that renders such contracts “null and void”.
- Improper Year-End Spending: At the close of both 1982 and 1983, the city improperly charged unencumbered expenditures against the following fiscal year’s budget.
Fund Mismanagement
- Improper Fund Accounting: The city failed to establish required special funds for Bond Retirement and for revenues from the Women, Infant, and Children (WIC) Program.
- Commingled Revenue: Fees from food service operations and trailer parks, legally required to be in special funds, were improperly posted to the General Fund.
- Inaccurate Reporting: The city failed to properly certify all its funds to the county auditor, and in some cases, improperly combined funds on its reports.
Risk Management
- Unsecured Deposits: The city’s funds on deposit at Bank One exceeded the amount the institution had pledged as security, putting public money at risk.
- Unbonded Official: The clerk of the municipal court had not acquired or filed the required performance bond of at least $6,000.
Information Technology Issues
The audit identified a critical internal control weakness related to the city’s use of computer technology.
- Lack of Access Controls: In the Sewer and Sanitation Department, all employees had access to the computer terminal and could post adjustments and payments to customer accounts. This absence of access controls created a significant opportunity for unauthorized adjustments and manipulation of revenues. The auditor recommended that access to the computer terminal be limited to one or two individuals.
Other Operational Issues
Operational failures in basic procedures and governance were the root cause of many of the financial and compliance issues.
Internal Control Weaknesses
- Lack of Segregation of Duties: A pervasive failure to separate financial duties was found in multiple departments. In the Sewer and Sanitation Department, Municipal Court, and Income Tax Department, single employees could control entire financial processes, from billing and collection to adjustments and reconciliation.
- Deficient Procedures: Basic procedures were consistently ignored. Invoices were paid without original copies or department head approval and were not cancelled after payment, creating a risk of duplicate payments. Numerous departments failed to issue prenumbered receipts for revenue, making it difficult to trace or account for all cash collected.
Poor Record-Keeping and Governance
- Inadequate Records: The city failed to maintain complete and accurate official records. The official minutes of city transactions were incomplete, the municipal court’s criminal docket was poorly maintained, and a comprehensive list of city property and equipment did not exist.
- Compliance Failures: The city failed to comply with various laws and regulations, including hospital trustees not taking their oath of office and improper public notices for Federal Revenue Sharing hearings.
History of Uncorrected Deficiencies
- Repeat Offenses: Several legal compliance citations in the 1983 audit were also cited in the prior audit report, indicating a failure to implement corrective actions.
Prior Findings Absolved: A prior audit resulted in Findings for Recovery for cash shortages against two individuals, but the City Council later passed an ordinance absolving them of personal liability.
***END FULL 1983 ASSESMENT***
The 1997/98 Echo
Fourteen years later, a 1997/98 state audit showed this same culture of negligence had simply metastasized into the city’s newer computer systems. The report is a terrifying echo of the past, showing a complete failure of IT governance.
- No Digital Accountability: The city did not assign individual IDs or passwords. This is the digital equivalent of giving every employee the same master key to the bank vault, making it impossible to audit financial activity.
- No Disaster Plan: The city had no off-site backups. A single fire or flood would have permanently erased all city financial records. It also had “no Disaster Recovery Plan,” guaranteeing a complete operational collapse in a crisis.
- Willful Neglect: The audit explicitly states the city knew it needed a security policy but “had not yet developed one.”
The Unbroken Pattern of Negligence
These audits show an identical mindset, separated only by time.
- The 1983 failure to separate paper duties (like collecting cash and adjusting the ledger) became the 1998 failure to separate digital duties (via shared passwords).
- The 1983 failure to track and insure physical assets (property, equipment) became the 1998 failure to protect digital assets (no off-site data backups).
To see the full list of issues from the 1997 era click below:
CLICK FOR FULL 1997 ASSESSMENT
Financial Issues
The audits revealed persistent financial control weaknesses, including large negative fund balances, mismanagement of federal grant money, and violations of state budget law.
Persistent Multi-Million-Dollar Negative Fund Balances: The same two funds showed significant deficits in both audits.
- In 1997, the Harding Center Construction Capital Project Fund had a deficit fund balance of $1,750,000, and the Sanitation Enterprise Fund had a deficit in unreserved retained earnings of $4,499,737.
- In 1998, these deficits continued, with the Harding Center fund showing a negative balance of $2,100,000 and the Sanitation fund showing a negative balance of $4,291,865.
- Note receivable from MSHLP (Harding Center Fund): $2,100,000 is carried on the 12/31/98 balance sheet (Note 11), even though the original loan principal was $1,750,000 (plus $10,000 of accrued interest, for a total of $1,760,000).
The result is a multi-year shortfall of nearly $7 million across two critical funds—an unmistakable material weakness in fiscal oversight
- Federal Grant Non-Compliance: The City failed to adhere to federal grant rules in both years, with different violations each time.
- 1997 – Improper Cash Management: The City violated the “Fifteen Day Rule” for its Community Development Block Grant (CDBG) program, which requires that drawn-down funds be spent to a balance below $5,000 within 15 days of receipt. Specific violations included:
- Receiving $400,000 for the Economic Development Program and expending none of it within the timeframe.
- Receiving $314,000 for the Community Housing Improvement Program but only spending $44,818 within 15 days.
- Receiving $209,300 for the Formula Grant Program but only spending $13,802 within 15 days.
- 1998 – Unallowable Costs: The audit identified specific questioned costs due to the misuse of grant funds.
- $12,619 from a Community Oriented Policing Services (COPS) grant was improperly used for prohibited police overtime and fringe benefits.
- $3,095 from a supportive services and senior centers grant was spent on the payroll of employees who did not provide grant-related services.
- Violation of State Budget Law: In 1998, the City’s appropriations illegally exceeded its certified estimated resources in three funds.
- CDBG Formula Fund: $216,000 over appropriations.
- Insurance Proceeds Fund: $25,000 over appropriations.
- Youth Center Fund: $1,240 over appropriations.
Information Technology Issues
The 1997 audit revealed a near-total lack of modern IT controls, and the 1998 audit showed that while the most critical Y2K issue was being addressed, it remained an unresolved risk.
- Year 2000 (Y2K) Compliance Failure:
- The 1997 audit found that the City’s NCR computer system for financial, payroll, utility, and income tax functions was not Y2K compliant, was no longer supported by the vendor, and the City had taken “no formal actions” to replace it. This was identified as a reportable condition.
- By the 1998 audit, the City was “in the process of remediating” its systems, having committed $233,881 for financial systems and $64,301 for the 911 system as of June 1999. However, the crucial testing and validation had not yet been completed, and the auditor expanded concerns to the Y2K readiness of external systems.
- Lack of Security Policy and Controls: The 1997 audit identified a complete absence of basic IT security governance.
- The City had no written security policy to govern the use of its computer systems.
- Specific access control weaknesses were pervasive:
- Individual user IDs and passwords were not assigned.
- Passwords were changed only about once a year.
- Users were allowed multiple unsuccessful log-in attempts.
- Users had access to the system prompt.
- No Disaster Preparedness: The 1997 audit found the City was completely unprepared for a potential IT disaster.
- The City had no disaster recovery plan to ensure continuity of operations.
- All computer backup tapes were stored on-site in the same building as the computer system, creating a high risk of total data loss.
Operational Issues
The combination of financial and IT weaknesses points to systemic operational failures in oversight and internal controls.
- Pattern of Federal Grant Mismanagement: The specific grant compliance findings in both 1997 (improper cash management involving over $900,000 in drawdowns) and 1998 (unallowed costs totaling $15,714) demonstrate a systemic weakness in the City’s ability to administer federal programs according to their rules.
***END FULL 1997 ERA ASSESMENT***
Lack of Formal Agreements: The 1997 audit noted that the City engaged in a major land sale transaction with a local development organization without a written agreement, a significant lapse in basic operational procedure and control.
This was the environment: a government operating with no digital locks on its doors, with unknown devices on its network, and with its most sensitive IT infrastructure treated like a spare room. This 40-year-old foundation of willful negligence created the perfect fertile ground for a catastrophe. The city’s financial house was a dry, brittle structure, waiting for a single spark to bring it all down.
That spark came disguised as progress: a new financial software system, reportedly highly contested according to past and current officials. And when it was installed, it wasn’t just another mistake. It was the bomb that detonated the entire fragile structure, turning decades of chronic negligence into the acute, explosive crisis we see today.
The Detonation
A bomb is not just its explosive material; it’s the faulty wiring and the hidden trigger. The New World software was Marion’s bomb, and it was wired to fail from the moment of its installation. A software vendor that has been repeatedly litigated against nationwide.
The core charge was set when the system was implemented with its legally-mandated safety controls—the internal “switches” designed to prevent financial errors—deliberately left in the “off” position, not installed, or misconfigured. The detonator was armed when a vital reconciliation module, a component required by law to properly balance the city’s books, was found to be missing entirely. This created a system that was not just flawed, but possibly illegal and perfectly suited to an environment where no one was watching the controls anyway.
The fuse was lit almost immediately. In 2010 the State of Ohio’s own auditors spotted the danger and issued 22 separate citations against the city, a massive and urgent warning. These citations specifically identified the bomb’s components: reconciliation issues, software issues, and financial control issues. Echoes of these issues continuing can be seen in council minutes, and official documentation, both past and present.
This was the moment the bomb could have been defused. Instead, in a stunning act of institutional negligence that perfectly mirrored the culture of lax oversight, the 22 warnings were ignored. The final, damning act was one of silence.
According to officials, the outgoing Schertzer administration, aware of the system’s critical deficiencies, failed to fully disclose them to the incoming Marion City Auditor administration in 2020, and later the Collins administration. Issues that later came to light in city council minutes in 2021.
This silence was the press of the button. The bomb was now guaranteed to explode, and the new administration was left standing at ground zero, completely unaware.
The 2021 Confession: A “Smoking Gun”
The 2021 Marion City Council minutes are the smoking gun of this financial catastrophe. They are the public, documented confession that city leadership knew the New World software was fundamentally broken, non-compliant, and had been for over a decade.
The minutes confirm this was not just incompetence, but a series of potential direct violations of the law.
- A Willful Violation of State Law: Ohio Revised Code (§ 117.38) mandates all city finances follow “generally accepted accounting principles” (GAAP). Yet, the city’s own analyst confirmed on November 8, 2021, that the system “has never worked correctly since 2008” and was a “mixed” system where critical data like receivables and payables “do not come into play.” This means for about 12 years, the city’s official financial statements were, by definition, a lie. Former Mayor Schertzer’s admission that this was “intentionally installed” as a preference makes this a deliberate, long-term violation of state law.
- A Breach of Federal Law: By receiving federal grants, the city is legally bound by federal law (2 CFR Part 200) to “maintain effective internal control.” The minutes, however, are a litany of failed controls, with members admitting the “books are not balanced” (11/8/21). A system that cannot be reconciled is the very definition of a material weakness, an open invitation to fraud that put all federal funding in legal jeopardy.
- A Willful Abdication of Oversight: The council’s “solution” was as negligent as the problem itself. Faced with 12 years of unbalanced books and known legal violations, they didn’t hire an independent CPA firm for a full, forensic audit to find the truth. Instead, the minutes show (ORD 2021-87) they approved a paltry $7,000 to pay Tyler Technologies—the very vendor of the broken software—to “analyze the system.” This decision was a fundamental conflict of interest, akin to hiring the arsonist to inspect the fire damage, and it guaranteed the true extent of the financial rot would remain hidden.
This was not a mistake; it was gross negligence. The council minutes show leaders knew the system was a trap, with State Auditors warning it “was not” set up right and forcing auditors to use “work arounds” that inevitably led to “mistakes” (11/22/21). They knowingly operated a defective system for about 12 years, setting an unavoidable bomb for future auditors and guaranteeing the catastrophic errors and penalties that followed.
Current officials advised that Veritas discovered the reconciliation module mandated by law was not installed in 2024, and was fixed along with other “safety controls” in 2025. Current officials confirm that this module had not been installed or functional since the installation of the New World software.
City Council Minutes 2021
Financial software not installed correctly
The Blast Wave
The explosion was not a single event, but a devastating, rolling blast wave that tore through the Auditor’s office, obliterating careers and public trust in its path. The auditors who followed were not the cause of the catastrophe; they were its first and most visible casualties, set up to fail by the bomb that had been planted before they arrived.
- The First Tremor (Auditor Kelly Carr): The compromised software was installed during her tenure, and the 22 state citations were the immediate fallout. The $22,500 finding for recovery against her for late tax filings was the first tremor, a sign of the immense pressures building up within the broken system.
- The Primary Explosion (Auditor Robert Landon III): Landon inherited the armed and ticking bomb. Blinded by a system that could not be reconciled due to the 13 year “workarounds” not being shared, his office made the inevitable catastrophic error: a $1.28 million tax payment was sent to the wrong government agency. This was the great fall of the bomb. The resulting $154,399 in IRS penalties was the sound of the main blast, an explosion of incompetence made unavoidable by the sabotaged system. His career was vaporized in the detonation. Current officials have advised Marion Watch that most or all of these penalties were abated, yet the false narrative of the previous administrations attacks continue. These attacks began when Landon announced his candidacy for city auditor and became explosive when the outgoing auditor filed a police report alleging election ballot material violations, a charge that was dismissed in the end. Further proving the political arena in Marion is often less about truth, than the culmination of power.
- The Aftermath (Auditor Miranda Meginness): Meginness was, according to the current auditor administration, thrown into the crater, tasked with rebuilding in the radioactive aftermath. However, the documentation tells a different story, leading to a chaotic series of secondary explosions: $84,215 in new fines, a potential $394,240 in IRS liabilities, and $54,000 in unnecessary interest payments to name a few. Her admission of hiding a penalty is described as intentional and unacceptable by the current council and citizens.
The Crater
When the smoke cleared, the cost of the explosion could be measured in the deep crater it left in the city’s finances. The price of the sabotaged software and the hidden issues is not a political talking point; it is a clear and devastating balance sheet of failure, paid for by the taxpayers of Marion. This is a small example of the more recent quantifiable damage from the bomb’s great fall:
- $22,500 Finding for Recovery: Against former auditor Kelly Carr for IRS penalties due to late filings of W-2s and 1099s for the 2019 tax year.
- $154,399 Finding for Recovery: Against former auditor Robert Landon III for IRS penalties and interest resulting from the $1.28 million tax payment misdirected by the non-compliant system’s failure.
- ~$54,000 Paid by City: For unnecessary interest on a fire truck financing deal, a secondary effect of the ongoing chaos under auditor Miranda Meginness.
- $84,215 Paid by City: For various fines, penalties, and fees for late payments to entities like OPERS during Meginness’s tenure.
- $394,240 in Potential Liability: For potential IRS fines due to a failure to comply with 1095-C regulations under Meginness.
- Pervasive Insider Theft (Brenda Nwosu): The theft by former city utility supervisor Brenda Nwosu (prosecuted for stealing tens of thousands of dollars) went undetected for over 3.5 years (from January 2011 to August 2014) and was only discovered by the State Auditor, confirming internal controls consistently failed to stop high-value insider fraud. Whats more is that current Marion City Finance Chair Twila Laing detailed that she reported grave IT and financial control issues in this department, warnings that were ignored.
- Multiple instances of passive sabotage: Several instances of fraud have taken place just this year, causing the city to open a new account, only to have the same thing happen again. The culprit, paper checks, considered an outdated practice in 2025 that leaves the city’s account number and routing number exposed to malicious actors.
- Unauthorized and illegal disbursement of funds: The Marion City Council’s Finance Committee voted unanimously (3-0) to advance a “cleanup” ordinance openly accusing the Auditor’s office of “misfeasance, malfeasance, and or nonfeasance” for paying a $58,000 bill without council approval.
The direct cost to the city in paid fines or recoverable funds totals $315,114. When including the potential liability from the IRS, the grand total for this financial catastrophe could exceed $700,000. This is the price of the explosion. This is an example of the more recent costs of the bomb.
Conclusion: The Bomb That Changed Everything
Today’s financial catastrophe in Marion is not the result of a slow decline. It is the direct result of a singular, explosive event. The 40 years of lax controls—a culture defined by shared passwords, rogue laptops, and a server room used as an office—created the conditions for disaster. But it was the installation of the compromised New World software, and the deliberate concealment of its flaws, that was the great fall of the bomb.
This one event transformed the city’s chronic weakness into an acute, full-blown crisis. It made massive failure inevitable and set off the chain reaction of resignations, penalties, and public mistrust that defines the city’s finances today. The story of Marion’s financial collapse is the story of this bomb: how it was built, how its warnings were ignored, and how its detonation blew a hole in the heart of the city’s government. The wreckage is still being cleared.
Works Cited
- Research By Marion Watch Investigates: marionwatch.com
- Ohio Auditor of State, Microfilm Audit Reports, City of Marion (1983-1984) https://drive.google.com/file/d/1zbgBeBnPTSstrtj82GIs5omyAVd8f8DY/view?usp=drive_link
- Ohio Auditor of State, Microfilm Audit Reports, City of Marion (1997-1998), https://drive.google.com/file/d/1wDUih_jfsrX0VxC-lgEnRZm_UYNw3Arg/view?usp=drive_link
- Marion City Council Minutes 2021, https://drive.google.com/file/d/1zAZ98XWyamRlx8gqvV7S5VfPRo7ehZJO/view?usp=drive_link
- Press Release • Ohio Auditor of State, https://ohioauditor.gov/news/pressreleases/Details/5948