Silent Sabotage: Did Marion Insiders Let Financial Problems Fester?

*All data regarding Audits were obtained through the Ohio Auditor of State.  (This directory holds .docx converted versions of the official Ohio Auditor of State Reports. Recreated for ease of research.)

Marion, Ohio, a municipality possessing deep historical roots, continues to confront significant fiscal challenges that jeopardize its future prospects, even amidst emerging signs of community resilience, such as the recent recognition garnered through the Strongest Town Contest. Achieving genuine stability, however, mandates directly addressing the city’s fundamental financial issues. Until municipal finances are demonstrably sound, sustained progress in other domains remains difficult. Furthermore, transcending the burdens of the past necessitates a candid acknowledgment of historical missteps and a departure from deflection or concealment, irrespective of the titles held by those involved. The fiscal lessons derived from Marion’s history are crucial; neglecting the wisdom gained from past challenges inevitably risks their recurrence.

For years, official audits—dating back to the late 1990s—have revealed a consistent pattern of financial mismanagement, documented difficulties with essential software systems (the full severity perhaps understood by only a limited number of individuals), and an increasing debt load, much of which has remained largely unnoticed by the public. This persistent financial instability has constituted a primary area of focus for MarionWatch since prior to our initial reporting in 2019. It is important for readers to understand the scope of this particular report: while extensive, our analysis concentrates primarily on the Marion City Auditor’s Office and draws heavily upon records originating from approximately 1999 forward. A complete comprehension of the city’s overall financial condition may necessitate further investigation into antecedent periods, more thorough examinations of other municipal departments, and ongoing scrutiny of current affairs. The aforementioned financial instability, particularly concerning the functions of the Auditor’s office as documented over the past two-plus decades, has been a principal subject of our work.

It is imperative to state unequivocally at the outset: the objective of this comprehensive investigation is not to assign culpability to any specific individual, office, or entity. Rather, our purpose is to furnish the public—the citizens of Marion—the voters with the detailed knowledge required to understand the deep-seated origins of this crisis (within the defined scope) and, critically, to empower the citizenry with the requisite information for informed decision-making regarding the city’s future trajectory. This need for clear, detailed information was notably evident during our interactions with several hundred Marion citizens throughout this process; a substantial majority indicated they were largely unaware of the extent and multi-decade history of the financial challenges documented herein.

With that objective guiding our efforts, this report thoroughly examines the fundamental causes of Marion’s fiscal struggles within the sphere of the Auditor’s office since 1999, considering the actions of elected officials who have overseen it, the role of relevant software providers, and the tangible impact upon city residents. This analysis transcends superficial treatment of immediate issues; we have undertaken an exceptionally thorough review of the available financial history within this specified scope. Readers should anticipate a detailed account (approx. 1 hour reading time); the evidence suggests that commonly repeated narratives may not represent the complete reality. (As part of our standard journalistic practice, NewsForce in collaboration with MarionWatch, attempted to contact the current Marion City Auditor and Deputy City Auditor for comment but received no reply to email inquiries.)

Marion, Ohio: A Community Forged in Crisis Rises as a City Reborn

The compilation of this report required considerable time and effort, and we wish to emphasize the extensive scope of this analysis. It represents nearly five months of recent intensive research, augmenting previous work that totals over a year focused on this specific area. Our team analyzed tens of thousands of pages of financial documents and consulted numerous technology and financial experts, in addition to the many residents interviewed. It remains noteworthy that no incumbent Marion City elected officials responded during our initial 2019 investigation, nor did they respond to inquiries for this current report. This pattern of non-response from incumbent officials has been consistent, even concerning potentially favorable coverage.

Information received from multiple sources indicated a concerning dynamic: a potential tendency for known operational or financial problems to be withheld from public view, possibly preserved for use as political leverage against new entrants to the political arena or against those voicing criticism. Several former and current officials willing to communicate confirmed accounts suggesting that numerous individuals departing key positions circa 2020 possessed significant understanding of these issues but reportedly remained silent. Such inaction arguably exacerbated decades-old problems and potentially hindered the success of subsequent administrations.

This extensive investigation reveals that Marion’s financial crisis, viewed primarily through the activities of the Auditor’s office since 1999, is not an abrupt development but rather the cumulative effect of decades of persistent mismanagement across various administrations and political affiliations overseeing that office. Our analysis details how inadequate oversight, questionable financial decisions, and failures to adapt have eroded the city’s fiscal foundation, impacting functions reflected in Auditor’s office records and audits, including those related to water/sewer departments and the general fund. Frequently, strategies prioritized short-term expediency over long-term stability, ultimately increasing vulnerabilities.

The consequences have widespread effects, potentially diminishing the capacity for essential service delivery, delaying critical infrastructure maintenance, damaging public trust, and creating impediments to economic development. Ultimately, the fiscal burden impacts taxpayers.

Looking forward, it is evident that superficial measures will prove insufficient. Meaningful recovery necessitates fundamental shifts in financial governance, including enhanced transparency, robust accountability mechanisms, and a steadfast commitment to long-term fiscal planning—changes likely required beyond the confines of the Auditor’s office. This path will invariably involve difficult choices.

Marion’s circumstances serve as a cautionary illustration of the critical importance of diligent financial stewardship. By elucidating the deep-rooted nature of this crisis within the defined scope through this comprehensive report, particularly given the apparent lack of widespread public awareness, we hope to provide an essential foundation for understanding and catalyze the implementation of meaningful reforms. However, this report is but one component. Building a more stable and prosperous future requires sustained vigilance and active civic engagement from the community. An essential element of this engagement involves residents maintaining a consistent presence and remaining actively informed, specifically through attendance at all sessions of the city council where key financial and operational decisions are deliberated. As part of our ongoing commitment to fostering transparency and accountability, the MarionWatch team commits to making every reasonable effort to attend these meetings henceforth. A future shaped by citizens making informed choices necessitates the presence of those citizens during critical municipal deliberations. We would like you to also understand that this is not a problem unique to Marion. We have been tracking trends that suggest a troubling number of Ohio towns are having similar issues. We may release a report on the Ohio situation at a later date.

Due to the comprehensive scope of this analysis, the MarionWatch team offers a summarized version below. Please note that while this overview highlights key findings, it omits important context detailed in the full report. We highly recommend reading the complete text for a comprehensive perspective.

Disclaimer

Disclaimer: It must be emphatically noted and understood throughout this report that the analysis presented herein is predicated solely upon the information contained within the referenced source documents made available for review during its preparation. Comprehensive details for every fiscal year encompassed within the extensive review period (1999-present), including the specific identification of the individuals serving as City Auditor throughout the entirety of this timeframe, are not consistently available or definitively ascertainable solely from these sources. Consequently, the attribution of specific findings or failures to particular individuals serving as Auditor is necessarily limited by the clarity and completeness of the available documentation, and this report endeavors primarily to focus on the documented issues and patterns observed within the office’s operations rather than assigning definitive fault or responsibility to specific individuals, particularly recognizing the significant potential for inherited systemic problems, inadequate resources, or external factors influencing performance over such a long period. The inclusion of precise monetary figures associated with reported deficits, outstanding debts, levels of uncollected revenues, or specific audit findings (such as Findings for Recovery) is strictly limited to those amounts explicitly quantified within the official reports or supporting documentation reviewed; potential additional unquantified financial costs (such as lost investment income on mismanaged funds) or broader economic impacts stemming from these issues (such as potentially higher borrowing costs due to perceived financial instability) are not estimated within the scope of this analysis. References made herein to potential statutory violations (e.g., specific sections of the Ohio Revised Code or related federal statutes) associated with particular allegations reported in source materials are based upon legal interpretations presented in those source materials (such as a specific legal analysis document provided concerning recent allegations) or are suggested by the apparent nature of the alleged conduct itself as described in public reports; such references serve solely to identify potential legal frameworks that might be applicable under certain factual circumstances and do not, in any way, constitute findings of legal guilt or official determinations of wrongdoing. The determination of actual legal culpability, whether civil or criminal, can only be established through formal legal adjudication processes adhering strictly to established principles of due process and requiring the attainment of the requisite high standard of proof (universally, proof beyond a reasonable doubt in criminal matters) within a court of competent jurisdiction. Findings for Recovery (FFR), while representing serious administrative actions by the State Auditor indicating financial impropriety or illegality, are official administrative determinations rendered by the Ohio Auditor of State concerning the improper or illegal expenditure of public funds, issued pursuant to specific statutory authority (ORC § 117.28), and are functionally and legally distinct from criminal indictments, criminal prosecutions, or subsequent convictions resulting from separate judicial proceedings typically initiated by independent law enforcement or prosecutorial agencies based on their own investigations. All information herein has been agreed upon to be as accurate and complete as possible. Financial experts and experts in information technology were consulted extensively. However, while professionals in the respective or appropriate professions were consulted this story, like all others we have published, and all we will publish belongs to the People of Marion. These stories and their roots are discussed at extreme length with the public on an ongoing basis since our founding. These articles, including this article, are our interpretation of expert analysis on subject matters, as well as incorporation of the diligence, experience, and professional knowledge of a statistically significant number of Marion’s Citizens.

Summary: Formal Analysis of Financial Deficiencies within the Marion City Auditor’s Office (1999-Present)

Introduction:

A comprehensive review encompassing over two decades of public records, primarily consisting of official Ohio Auditor of State (AOS) audit reports and related communications, reveals a persistent and concerning pattern of documented financial mismanagement, significant internal control weaknesses, costly operational errors, and serious allegations of misconduct intrinsically associated with the Marion City Auditor’s office. This documented pattern spans multiple mayoral and auditorial administrations (circa 1999-Present), strongly suggesting the potential existence of underlying systemic challenges that may extend beyond the performance or actions of any single individual officeholder. The City Auditor, operating as the municipality’s chief financial officer, holds critical statutory and fiduciary responsibilities essential for sound governance. These include ensuring accurate financial record-keeping compliant with governmental accounting standards, upholding strict legal and regulatory compliance in all financial transactions, effectively safeguarding public funds against loss or misuse, and providing reliable, timely financial data crucial for informed decision-making by City Council and administrators. Failures within this pivotal office, as documented over the period reviewed, directly impact the City’s fundamental financial health, its creditworthiness in municipal markets, its ability to efficiently deliver essential public services, and ultimately, the foundational public trust necessary for effective local government. This summary synthesizes the key findings derived from a detailed forensic analysis of the available records, highlighting recurring issues (such as budgetary non-compliance and reconciliation failures), significant adverse events like Findings for Recovery (FFR), relevant contextual factors including the possibility of inherited systemic problems complicating successive administrations, specific operational incidents like the major federal tax remittance error detailed in internal staff reports, and recent serious allegations against the current incumbent, all while endeavoring to maintain an objective perspective focused on the documented evidence.

Disclaimer: This summary is predicated solely upon the available source documents referenced in the full analysis. Attributing specific findings definitively to individuals is constrained by the limitations of this documentation; therefore, the focus remains primarily on observable performance patterns within the office itself over time. References herein to potential legal or statutory implications are based on interpretations presented in source analyses and do not constitute formal findings of legal guilt, which require separate judicial processes. Findings for Recovery (FFR) represent official administrative determinations by the AOS regarding improperly or illegally expended public funds, distinct from criminal charges or convictions.

I. Initial Period and Inherited Challenges (FY 1999 – FY 2008)

The earliest reviewed audits (FY 1999-2000) established a baseline revealing significant financial challenges potentially inherited by subsequent officeholders. These included substantial General Fund operating deficits (exceeding $2.3 million annually), indicating a structural imbalance where expenditures consistently outpaced revenues. Concurrently, considerable levels of uncollected taxes (over $2.5 million in FY 1999, escalating to $4.4 million by FY 2007) and rising city debt (from over $19 million in FY 1999 to $26.7 million by FY 2007) further strained municipal resources and limited future flexibility. These trends signaled underlying fiscal pressures confronting the City’s financial leadership. A specific instance of improper expenditure resulted in a Finding for Recovery (FFR) of $1,173.48 issued against a Deputy Auditor for processing salary payments exceeding ordinance limits in FY 2006 (ORC § 117.28), highlighting that accountability issues extended beyond the elected official. The FY 2008 audit, conducted during an administrative transition (Auditor Pro Tempore Strzelecki preceding Auditor Carr), formally identified multiple internal control weaknesses. These included material weaknesses (indicating a higher risk of undetected material misstatement) in critical areas such as cash collections procedures and the processes for collecting delinquent income taxes and utility payments. Crucially, this audit also documented material non-compliance with state budgetary law (ORC § 5705.39) due to appropriations exceeding certified estimated resources, a significant finding that was explicitly noted as uncorrected and persisted into the subsequent administration, immediately presenting a major compliance challenge for the incoming Auditor.

II. Recurring Deficiencies and Operational Failures (Auditor Carr Tenure, Approx. FY 2009 – FY 2019)

Auditor Carr’s tenure commenced amidst these documented, pre-existing challenges. Despite potential efforts toward improvement, audits during this period continued to identify significant issues, suggesting the difficulty of overcoming potentially ingrained problems:

• Persistent Control Weaknesses: State audits repeatedly cited critical internal control deficiencies classified as material weaknesses. Notably, these included the failure to consistently obtain prior certification of funds availability before financial obligations were incurred by City departments, a violation of ORC § 5705.41(D) that directly undermines budgetary control and risks illegal spending. Equally persistent was the failure to perform timely and accurate bank reconciliations, a fundamental control procedure essential for detecting errors, reconciling cash balances, and preventing or identifying potential fraud; its continued absence over multiple years represented a significant, unresolved vulnerability for the City’s finances.
• Budgetary Non-Compliance: The violation of ORC § 5705.39, involving appropriations exceeding certified resources, continued to be reported as a repeat finding, particularly in the FY 2009 and FY 2011 audits. The persistence of this material non-compliance with core state budgetary law, despite pointed critical commentary from the AOS urging corrective action, signaled a serious breakdown in the City’s budgetary discipline and oversight processes during this time.
• Operational Failures & Software Issues: The FY 2010 audit proved particularly problematic, documenting an alarming 22 distinct findings. The AOS characterized this situation as reflecting “numerous material control weaknesses and lack of management oversight,” indicating pervasive, rather than isolated, problems. Specific issues encompassed systemic failures across various financial functions, non-compliance with complex federal grant management requirements (risking loss of funding), and the continuation of budgetary violations. Furthermore, chronic operational problems associated with the City’s financial software system (Tyler/New World, implemented circa 2008-09) were explicitly cited by the AOS as significant contributing factors to these numerous deficiencies. These software issues reportedly hindered essential operations like bank reconciliation and timely financial reporting, potentially masking other underlying procedural or human resource weaknesses and consuming significant staff time in workarounds and troubleshooting.
• Finding for Recovery: A significant financial consequence arose from administrative failures near the end of this tenure. An FFR for $22,500 was issued against Auditor Carr (liability assessed post-departure) under ORC § 117.28. This amount represented IRS penalties directly incurred by the City due to the Auditor’s office’s failure to file required 2018 employer tax information forms (W-2s and 1099s) by the federal deadline in early 2019. The AOS deemed the incurrence of these penalties through administrative negligence an illegal expenditure of public funds, making the amount recoverable from the responsible official and representing a direct, avoidable cost to taxpayers resulting from a failure to perform a routine, mandatory administrative function.

III. Major Error and Continued Instability (Auditor Landon Tenure, Jan 2020 – Oct 2021)

Auditor Landon assumed office inheriting the aforementioned historical challenges and known operational weaknesses. His tenure was further complicated by a documented pre-election controversy concerning campaign materials, which led to a police investigation, reflecting a potentially contentious political environment. Operationally, his time in office was significantly defined by the occurrence and fallout of a critical financial processing error:

• Federal Tax Remittance Error: A catastrophic error resulted in approximately $1,280,000 in federal payroll withholdings being erroneously remitted electronically to the State of Ohio’s tax authority instead of the correct recipient, the U.S. Internal Revenue Service, over a period of approximately seven months (June 2020 through December 2020).
  • Context: An internal staff incident report provided detailed context suggesting multiple contributing factors to the error’s initiation and prolonged non-detection. These included significant staff inexperience with the payroll system operating without direct supervision during a key personnel absence; an inadvertent but critical mistake involving the deletion of the entire federal tax payment account setup within a third-party payment software while attempting to correct an unrelated payroll batch error; potentially flawed or misunderstood guidance received from the software vendor’s support during the urgent account recreation process (reportedly observed by Auditor Landon and his deputy); and subsequent critical communication breakdowns or lack of effective follow-through within the Auditor’s office regarding identified discrepancies in the new account setup, leading to a failure to investigate and correct the misconfiguration promptly.
• Control Failure Link Implicated: State auditors, in their subsequent investigation, explicitly linked the failure to detect this massive $1.28 million error for over six months directly to the long-standing, previously documented, and apparently still unresolved material weakness in the office’s bank reconciliation procedures. Effective reconciliation, a control repeatedly flagged as deficient in prior audits under previous leadership, should have identified anomalies related to these substantial, recurring electronic payments much earlier, thereby mitigating the eventual financial damage. This finding starkly illustrated how neglecting fundamental, previously identified control weaknesses can directly contribute to the occurrence and amplify the impact of subsequent major operational errors.
• Finding for Recovery: A direct consequence of this error and the associated control failures was the issuance of an FFR for $154,399 under ORC § 117.28 against Auditor Landon and his official bonding company. This substantial sum represented the penalties and accrued interest assessed by the IRS against the City due solely to the incorrect and untimely remittance of federal taxes originating from the operational failure within the Auditor’s office during this period. The AOS classified these imposed costs as “unnecessary expenditures that did not serve a proper public purpose,” rendering them recoverable illegal expenditures under Ohio law, representing a significant direct financial loss for Marion taxpayers resulting from administrative failure.
• Audit Delay and Resignation: The completion of the City’s mandatory FY 2020 state audit was significantly delayed, attributed primarily by the AOS to the Auditor’s office’s extensive difficulties in reconciling the City’s complex financial records to auditable standards, a task greatly compounded by the need to meticulously untangle and correct the pervasive accounting impact of the $1.28 million tax remittance error. Auditor Landon resigned from office in October 2021, prior to the final issuance of the FY 2020 audit report, citing health reasons and alleging political interference as factors in his departure.

IV. Ongoing Challenges and Allegations of Misconduct (Auditor Meginness Tenure, Nov 2021 – Present)

The current period under Auditor Meginness (initially appointed to fill the vacancy, subsequently elected) exhibits a continuation of significant operational difficulties, potentially reflecting the persistence of inherited systemic issues, alongside the emergence of serious allegations concerning the Auditor’s personal conduct:

• Persistent Operational Issues: Available evidence suggests continued struggles within the Auditor’s office regarding timely and accurate bank reconciliations, a core control weakness noted even by an external accounting firm after the implementation of new financial software in December 2022. Furthermore, significant federal tax compliance issues appear ongoing, with reports of substantial new IRS penalties accrued or assessed during her tenure. These include amounts exceeding $84,000 for various late payments, potential liabilities reaching up to $394,240 related to alleged non-compliance with Affordable Care Act reporting (Form 1095-C), and over $70,000 documented as unpaid prior payroll tax penalties (Form 941). This pattern indicates that systemic problems in managing complex federal tax requirements and maintaining fundamental financial controls may persist within the office, resulting in significant realized or potential financial costs for the City regardless of the specific individual holding the position.
• Allegations of Intentional Misconduct: Compounding the operational concerns, serious public allegations have surfaced regarding potential intentional wrongdoing by Auditor Meginness. These include reports concerning alleged admissions by the Auditor to misappropriating city funds and, critically, to deliberately miscoding at least one expense transaction within the accounting system with the specific intent to conceal an IRS penalty payment from oversight. Additionally, specific public allegations were made by a council member regarding the potential falsification of official ordinances and the authorization of improper payments using falsified documentation. While these remain allegations requiring formal investigation and due process, if substantiated, such actions could potentially implicate serious Ohio criminal statutes including Theft in Office (ORC § 2921.41), Tampering with Records (ORC § 2913.42), and potentially Dereliction of Duty (ORC § 2921.44) related to the ongoing tax compliance issues if recklessness is determined. These allegations introduce a profoundly concerning dimension beyond mere administrative incompetence.
• Political Fallout and Governance Impact: The documented operational issues and serious allegations culminated in significant political tension, most notably demonstrated by an overwhelming 8-to-1 Vote of No Confidence formally passed by the Marion City Council in January 2024. This action occurred shortly after the Auditor publicly rescinded her previously announced resignation just before its effective date, and it signaled a profound loss of trust and breakdown in the working relationship between the legislative body and the City’s chief financial officer, significantly hindering effective governance and collaborative financial oversight during a critical period.

Conclusion:

The comprehensive analysis of over two decades of financial records reveals a multi-decade pattern of significant financial vulnerability within the City of Marion, strongly and persistently associated with documented deficiencies originating from or perpetuated within the City Auditor’s office across multiple successive administrations. Recurring material weaknesses in core internal controls (most notably, consistent failures in performing timely and accurate bank reconciliations), repeated material non-compliance with fundamental state budgetary laws (ORC § 5705.39 regarding appropriations), major operational errors leading to substantial financial penalties and formal Findings for Recovery (cumulatively totaling over $178,000 from just three specific incidents identified across different tenures), and chronic difficulties potentially exacerbated by inadequate or problematic financial software systems serve to characterize this extended period of fiscal instability. The very persistence of these varied issues across different elected auditors strongly suggests the influence of deep-rooted systemic challenges within the office or the broader City financial ecosystem. It remains plausible that successive auditors inherited significantly mismanaged financial records, inadequate technological tools, and entrenched operational deficiencies, thereby complicating subsequent reform efforts and potentially contributing to the continuation of identified problems despite changes in leadership. Critical commentary from successive Ohio Auditors of State over the years further underscores the severity and duration of these documented problems, repeatedly urging corrective action. While a review of limited statewide late fee data suggests that challenges with timely payments and regulatory compliance are not entirely unique to Marion among Ohio public entities, the scale of certain specific penalties incurred by Marion (particularly the $154k FFR) and the documented persistence of fundamental control weaknesses (like basic bank reconciliation failures) over such an extended timeframe appear particularly significant and potentially indicative of deeper, more systemic issues requiring more comprehensive solutions compared to potentially more isolated compliance lapses documented elsewhere. The recent emergence of serious allegations involving potential intentional misconduct against the current Auditor adds another deeply concerning layer of complexity and potential legal jeopardy to this already troubled history. This long and documented history of fiscal deficiencies originating from the City’s primary financial oversight office has likely contributed significantly to an erosion of public trust, potentially damaged the City’s financial reputation, and demonstrably hampered its capacity to maintain a consistently sound and stable financial position necessary for effective service delivery and community investment. Addressing this situation effectively appears to necessitate far more than the remediation of individual audit findings as they arise or focusing blame solely on the actions of specific individuals during their respective time in office. It strongly suggests the critical need for a comprehensive, systemic overhaul focused deliberately on addressing the underlying causes of these persistent failures. Such an overhaul must involve the implementation and consistent enforcement of robust, verifiable internal controls across all financial functions; ensuring strict adherence to public finance laws and regulations at all levels; making strategic investments in reliable financial systems accompanied by thorough staff training and ongoing support; demanding significantly higher standards of professional competence and unwavering ethical conduct from all financial officials, coupled with meaningful accountability mechanisms; and, crucially, implementing sustained, informed, and rigorous oversight practices, particularly exercised by the City Council in its legislative and fiduciary capacities, designed specifically to break this observed multi-decade cycle of deficiency and definitively restore lasting confidence in the integrity and competence of the City of Marion’s financial stewardship for the future.

Formal Analysis of Financial Deficiencies within the Marion City Auditor’s Office (1999-Present)

Introduction:

A rigorous examination of the historical financial condition and sustained operational efficacy of the City of Marion, Ohio, operating as a municipal corporation under state law, necessitates a comprehensive and detailed review of the functions, performance standards, internal controls, and external oversight mechanisms associated with the Office of the City Auditor. As the statutorily designated chief financial officer for the municipality, an office vested with significant public trust and filled via periodic public election, the City Auditor is charged with fiduciary responsibilities of paramount significance to the proper and lawful functioning of local government. These legally mandated duties, delineated within the Ohio Revised Code and relevant municipal ordinances, encompass far more than the mere clerical functions of bookkeeping or routine transaction processing; they fundamentally include the meticulous tracking and accurate recording of all municipal revenues and expenditures in strict accordance with generally accepted accounting principles (GAAP) as promulgated for governmental entities by the Governmental Accounting Standards Board (GASB), thereby ensuring the fundamental integrity and objective reliability of the City’s financial data, which serves as the basis for virtually all fiscal decision-making. Furthermore, the Auditor is responsible for the diligent maintenance of accurate, complete, verifiable, and transparent financial records suitable for independent external audit by the state or contracted firms and readily accessible for appropriate public scrutiny under applicable Ohio public records laws, thereby fostering essential governmental accountability and transparency to the citizenry. Integral to this multifaceted role is the unwavering adherence to a complex matrix of state and federal statutes, administrative regulations, grant agreement stipulations, and local ordinances governing the receipt, custody, safeguarding, investment (where applicable), and lawful disbursement of public funds derived from diverse sources, including taxation, intergovernmental aid, user fees, and debt proceeds. This necessitates that the Auditor and their staff possess and maintain a high degree of specialized legal and regulatory compliance knowledge pertinent to public sector finance.

However, a meticulous review encompassing more than two decades of publicly accessible records – primarily constituted by official annual audit reports, accompanying management letters detailing specific internal control deficiencies and compliance exceptions, related official communications issued by the Ohio Auditor of State (AOS), the independent state entity constitutionally and statutorily charged with the critical function of auditing all public offices within Ohio to ensure fiscal accountability and compliance with applicable laws – indicates a consistent, recurring, and deeply concerning pattern of identified deficiencies intrinsically associated with the operational performance and internal control environment of the Marion City Auditor’s office. These formally documented issues, identified through the application of independent external audits conducted under established professional governmental auditing standards (GAGAS), are demonstrably not trivial administrative variances or minor procedural discrepancies that might be easily dismissed as isolated incidents. They encompass demonstrable instances of financial mismanagement leading directly to adverse fiscal consequences for the City. Notably, some of the periods marked by severe infractions and significant financial deficits coincided with the intensification of a severe public health crisis related to addiction within the community.

There were significant and often repeated weaknesses identified in fundamental internal control structures specifically designed to prevent or detect material error and fraud within critical financial processes (such as cash handling, payroll, accounts payable, and financial reporting); costly operational errors resulting directly in quantifiable financial losses for the municipality and its taxpayers through the imposition of penalties, the accrual of avoidable interest charges, or the issuance of recoverable expenditure findings; and, particularly noted in more recent periods under review, the emergence of serious allegations involving potential impropriety and intentional misconduct directed specifically at the incumbent officeholder, raising profound questions that transcend mere assessments of administrative competence or negligence. The documented recurrence of these diverse deficiencies across multiple electoral cycles and distinct administrative tenures, involving different individuals serving as the elected City Auditor during this extended period, strongly suggests the presence of underlying systemic challenges potentially rooted within the office’s established operational procedures, its personnel management practices (potentially including adequacy of professional training, sufficiency of qualified staffing levels relative to workload complexity, and effectiveness of internal supervision and quality control), inherent limitations or critical failures of its technological infrastructure supporting complex financial operations, or perhaps structural inadequacies in the external oversight mechanisms intended to ensure consistent performance standards and enforce meaningful, timely accountability for persistent failures within this critical elected office. It is therefore plausible, given this extensive documented history of recurring problems, that successive auditors assuming the office may well have inherited financial records, operational systems, and potentially even staff capabilities already burdened by significant pre-existing mismanagement, inadequate documentation, and entrenched control weaknesses, thereby significantly complicating subsequent efforts toward comprehensive remediation and potentially contributing, at least in part, to the documented continuation of identified problems across administrative transitions.

Additionally, the Auditor serves a critical informational and analytical function within the municipal government structure, requiring the timely provision of precise, reliable financial data, insightful financial analysis (such as budget variance reporting, cash flow projections, and debt capacity analysis), and objective reporting to the City Council (the legislative body responsible for appropriations and policy) and appointed administrative leadership (including the Mayor and department heads) to facilitate informed policy development, effective and efficient resource allocation across competing municipal priorities, sound long-term financial planning incorporating realistic revenue forecasting and expenditure control, prudent debt management strategies, comprehensive capital improvement planning, and ultimately, the practice of responsible fiscal governance that consistently aligns municipal expenditures with duly enacted legal authority and demonstrably available financial resources. The proficient, ethical, and technically competent execution of these numerous and complex responsibilities by the Auditor’s office directly and materially influences critical aspects of the municipality’s overall standing, operational capacity, and long-term viability, extending well beyond the immediate confines of the finance department itself. These significant influences encompass, inter alia, its perceived creditworthiness within the specialized municipal bond markets, which dictates its consequent ability to secure favorable terms and competitive interest rates for necessary long-term debt issuance related to capital improvements and essential infrastructure projects – directly impacting the ultimate long-term cost borne by taxpayers for these investments. The Auditor’s performance also profoundly impacts the judicious, equitable, and lawful allocation of inherently limited tax revenues among competing public demands for essential municipal services such as robust public safety operations (police and fire protection services), diligent maintenance and improvement of critical public infrastructure (including roads, bridges, water distribution, and sewer collection systems), effective public health initiatives addressing community needs, and the provision of valuable community welfare programs enhancing quality of life. Perhaps most fundamentally, the consistent, reliable, and verifiable performance of the City Auditor’s office directly shapes the cultivation, maintenance, and potential erosion of public trust and confidence in the fundamental integrity, operational competence, and unwavering accountability of local government operations as a whole. Failures within this office can thus have far-reaching consequences for the relationship between the government and the governed.

Hometown Hero: Ed McCants – A Marion Champion Building a Stronger Town

These documented issues appear, based on the earliest available audit records referenced within the source materials utilized for this analysis, to have originated circa 1999 and demonstrably extended, albeit manifesting in various specific forms and fluctuating degrees of reported severity depending on the audit year and specific circumstances, through the most recent reporting periods accessible and relevant for inclusion in this comprehensive longitudinal analysis. This analysis endeavors to incorporate pertinent details extracted from specific available contemporaneous records where available and relevant, including internal incident reports generated by City staff (such as the detailed report prepared by the involved staff member concerning the specific circumstances surrounding the initiation and prolonged non-detection of a major federal tax remittance error during FY 2020) and other documents reflecting the broader political or operational context surrounding certain periods (such as timelines related to specific election controversies or documentation regarding software implementation challenges), in order to provide granular context and potentially illuminate contributing factors where such documentation permits, while steadfastly maintaining an objective analytical stance regarding definitive statements of causality or individual fault, particularly where systemic factors appear relevant.

This analysis will proceed through a detailed chronological exposition, delineating specific audit findings reported by state auditors on a fiscal year-by-fiscal year basis, thereby providing a crucial longitudinal perspective necessary to understand the performance trajectory, recurring challenges, and potential systemic nature of issues within the Auditor’s office over an extended timeframe exceeding two decades. The examination will encompass significant weaknesses identified in fundamental financial procedures, such as the routine and accurate reconciliation of numerous municipal bank accounts against official depository statements – a control activity universally recognized by financial management professionals and auditing standards as absolutely critical for ensuring the accuracy of reported cash balances, verifying the completeness and validity of recorded transactions, and detecting unauthorized or erroneous disbursements or deposits in a timely manner essential for preventing or mitigating financial loss. It will also detail repeated, documented violations of foundational state budgetary statutes governing Ohio local governments, particularly those codified provisions within the Ohio Revised Code that strictly prohibit governmental expenditures from exceeding legally certified available resources within designated funds (e.g., ORC § 5705.39), a statutory cornerstone intended explicitly to ensure sound public financial management practices and prevent uncontrolled deficit spending at the local government level in Ohio. Instances wherein documented operational errors directly precipitated quantifiable financial losses to taxpayers, most notably through the formal administrative issuance by the AOS of Findings for Recovery (FFR) mandating the restitution of public funds determined through audit procedures to have been improperly or illegally expended, will be explicitly noted along with the associated monetary amounts specified within the official audit reports, providing concrete examples of the financial impact of these failures. Furthermore, pertinent official commentary extracted directly from AOS audit reports or related official communications issued by the State Auditor’s office, wherein the State Auditor explicitly addressed identified deficiencies, commented upon their perceived severity or concerning persistence across multiple audit cycles, or formally urged specific corrective actions to be undertaken by City management or the Auditor’s office itself, will also be referenced where available to provide essential context regarding the perception and formal assessment of these ongoing issues from the authoritative perspective of the state’s primary external financial oversight body.

In addition to discrete audit findings related specifically to internal controls and statutory compliance matters, this analysis will necessarily address persistent operational challenges documented over the extended period under review that likely impacted, directly or indirectly, the Auditor’s office’s overall performance and ability to meet its responsibilities effectively. This includes acknowledging the recurrent difficulties associated with the City’s financial accounting software systems, which, based on consistent commentary within state audit reports spanning multiple years and involving different software platforms or versions, appear to have potentially exacerbated existing internal control weaknesses (e.g., reported difficulties in performing effective and efficient reconciliations due to system limitations), hindered the overall efficiency of routine financial operations, or limited the capabilities for sophisticated financial management analysis and the generation of timely, accurate, and user-friendly reporting crucial for informed decision-making by City leadership. Additionally, the serious allegations directed at the current Auditor concerning potential statutory violations under Ohio law – including, but not limited to, actions potentially constituting Theft in Office, Tampering with Records, and Dereliction of Duty – will be outlined based on available public reports and related legal analyses provided as source material, while carefully and consistently maintaining the critical professional distinction between documented allegation, reported admission (the veracity and context of which may require further investigation), and established legal fact pending the outcome of formal, independent investigation and potential subsequent adjudication processes adhering to due process standards. The overarching objective of this comprehensive report, therefore, is to present a factual, evidence-based, objective, and dispassionate account of these extensively documented financial issues associated with the Marion City Auditor’s office over an extended historical timeframe, illustrating not only their specific nature and financial impact but also their temporal duration, their apparent systemic characteristics recurring across administrations, and their potential cumulative detrimental impact on the City’s overall financial health, operational effectiveness, and fundamental governmental legitimacy in the eyes of its constituents, thereby providing essential context for understanding the documented erosion of public confidence and the ongoing, multifaceted challenges confronting the City of Marion in achieving sustained fiscal stability and demonstrating consistently accountable financial stewardship, irrespective of the specific individuals holding the office of Auditor during particular periods within this history.

I. Initial Period and Interim Appointments (FY 1999 – FY 2008)

• Auditor(s): Records reviewed for this analysis do not consistently permit the definitive identification of the individual serving as the elected City Auditor for the entirety of the period spanning 1999 through 2007; official documentation does indicate, however, that Ms. Linda Strzelecki served in the capacity of Auditor Pro Tempore circa the fiscal years 2008-2009, suggesting a potential vacancy, administrative transition, or formal interim appointment occurred during that specific timeframe preceding the election and assumption of office by the subsequent Auditor. The financial conditions and operational deficiencies documented during this initial period represent the crucial baseline environment and potential challenges inherited by subsequent administrations seeking to manage the City’s finances.

FY 1999 (Reported 2000):

• Finding: A substantial General Fund operating deficit was officially reported by the external auditors contracted by the City for this fiscal year’s audit. Amount: $2,380,000. The existence of an operating deficit of this considerable magnitude within the City’s primary operational fund (the General Fund, which typically supports core, non-enterprise governmental services like public safety, general administration, parks, etc.) signifies a severe structural imbalance wherein governmental expenditures authorized and incurred during the fiscal period significantly surpassed the actual revenues collected and recognized from sources like taxes and intergovernmental aid during that same period. Such conditions, particularly if they become persistent rather than isolated occurrences, typically precipitate considerable operational difficulties for a municipality. These potential consequences can include recurring cash flow crises requiring emergency management actions, potential delays in meeting timely payment obligations owed to external vendors for essential goods and services or even to municipal employees for payroll, and potentially necessitating reliance upon interfund borrowing (a practice which, while sometimes necessary for short-term liquidity management, can obscure the true financial health and operational sustainability of individual governmental funds if utilized chronically or improperly without clear repayment plans) or the issuance of short-term debt instruments (such as tax anticipation notes or revenue anticipation notes) merely to maintain sufficient operational liquidity throughout the fiscal year, thereby incurring additional, often avoidable, interest costs that further strain the already stressed municipal budget and reduce resources available for service delivery.
• Finding: Uncollected taxes receivable were reported at a substantial level relative to the City’s overall budget and anticipated revenue base for the year. Amount: Approximately $2,580,000. This figure represents a significant quantum of legally levied and properly owed tax revenue (likely encompassing a combination of municipal property taxes, locally levied income taxes, and potentially other specific local taxes or fees) that remained uncollected by the City administration and outstanding at the close of the fiscal year. Such substantial levels of tax delinquency directly strain municipal resources by reducing the available operating cash flow needed to fund budgeted services and meet ongoing financial obligations in a timely manner. Furthermore, chronic high levels of uncollected taxes can potentially lead to inequitable financial burdens being borne disproportionately by those taxpayers and businesses who consistently remit their tax obligations in a timely and compliant manner, as essential service levels might eventually need to be adjusted downwards or other revenue sources (like increased fees or tax rates) might need to be sought to compensate for the persistent revenue shortfall caused by delinquencies. This finding may also indicate underlying deficiencies in the City’s established systems and procedures for accurate tax assessment, timely and clear billing practices, diligent tracking and aging analysis of outstanding receivables, and the implementation of effective, consistent, and legally compliant enforcement or collection efforts for delinquent accounts – processes significantly influenced by the operational effectiveness, technological capabilities, staffing levels, and overall administrative diligence exercised within the Auditor’s office and related municipal revenue collection departments (such as the City’s Income Tax Department, which in many Ohio cities operates under the administrative purview of the City Auditor).
• Finding: The City’s reported aggregate outstanding debt level was considerable for its operational scale and available revenue base at that particular time. Amount: $19,900,000. This represented a significant accumulation of outstanding long-term and potentially short-term debt obligations (likely including various types of debt instruments such as general obligation bonds backed by the City’s full faith and credit and taxing power, potentially revenue bonds secured by specific enterprise fund revenues like water or sewer charges, governmental loans obtained from state or federal programs, capital lease obligations for equipment or facilities, etc.) for a municipality of Marion’s demographic size and underlying economic profile at that specific historical juncture. Servicing such a substantial portfolio of municipal debt necessitates the mandatory, non-discretionary allocation of significant annual budgetary resources solely for the payment of contractually required principal installments and accrued interest obligations as they become due. This mandatory annual debt service burden thereby potentially circumscribes the discretionary funds available year after year for allocation by City Council towards essential current public services, necessary preventative maintenance programs or strategic expansion initiatives related to critical infrastructure (such as roads, bridges, water distribution systems, and sewer collection networks), investment in forward-looking community development projects aimed at fostering economic growth and enhancing quality of life, or the crucial and prudent financial practice of building and maintaining adequate unrestricted financial reserves (often referred to as unassigned fund balance in the General Fund) to provide a vital fiscal cushion against unforeseen emergencies, unexpected revenue shortfalls, or cyclical economic downturns. High debt levels inherently reduce future financial flexibility.
• Note: The annual financial audit for this particular fiscal year was conducted not directly by the audit staff employed by the Ohio Auditor of State’s office, but rather by an external independent Certified Public Accounting (CPA) firm engaged contractually by the City of Marion, a practice permitted under certain circumstances by Ohio law (often utilized when state resources are constrained or specialized expertise is needed). The resulting independent audit report, however, was formally submitted to and subsequently reviewed and accepted by the Ohio Auditor of State’s office, signifying that these identified baseline fiscal conditions (namely, the significant operating deficit, the high level of uncollected taxes, and the considerable outstanding debt) were officially documented through established state oversight protocols and acknowledged as part of the official financial record for the City, lending credence to their significance as important indicators of the City’s overall financial health and potential challenges at the turn of the millennium.

“Walk Away Ray”: Marion County Prosecutor Faces Public Outcry Over Mishandled Cases

FY 2000 (Reported 2001):

Finding: The General Fund operating deficit persisted at a significant, albeit slightly reduced, level compared to the prior fiscal year, indicating the financial imbalance continued. Amount: $2,320,000. The continuation of a large operating deficit, even demonstrating marginal improvement from the previous year’s substantial figure, strongly suggested the persistence of either an underlying structural imbalance between the City’s recurring municipal revenues and its ongoing operational expenditures that had not yet been adequately addressed through substantive budgetary adjustments or revenue enhancements, or potentially reflected a continuing lack of sufficiently effective fiscal controls necessary to consistently align departmental spending patterns with realistically available financial resources throughout the course of the entire fiscal year. Chronic operating deficits of this nature, particularly if allowed to continue unaddressed over multiple consecutive fiscal years, can signal fundamentally unsustainable financial practices within a municipality and potentially lead it toward a state of fiscal distress requiring more drastic intervention or external oversight under Ohio law.

Note: The audit for this fiscal year was again conducted by external accountants engaged by the City, with the resulting report subsequently reviewed and accepted by the AOS, thereby reinforcing the official documentation of the ongoing significant deficit condition facing the City at that time.

FY 2006 (Reported 2008):

Finding: A Finding for Recovery (FFR) was formally issued by the Ohio Auditor of State pursuant to its specific statutory authority granted under ORC § 117.28 to identify and facilitate the recovery of public funds deemed to have been improperly or illegally expended. Target: Former Deputy Auditor Kathy Sherer. Amount: $1,173.48. Reason: The AOS investigation, conducted as an integral part of the standard annual financial and compliance audit procedures for Fiscal Year 2006, determined through detailed examination of municipal payroll records and relevant controlling legislative authority (a specific City Ordinance establishing salary scales or maximums) that salary payments processed and disbursed by the City Auditor’s office to this specific individual during the audited period exceeded the legally established maximum compensation level stipulated for her position by that ordinance. Such payments, lacking the requisite legislative authority for the excess amount paid or demonstrably deviating from established legal mandates governing employee compensation within the City, constituted an illegal expenditure of public funds under established principles of Ohio municipal law. This particular finding, directed specifically at a subordinate employee (the Deputy Auditor) rather than the elected Auditor, serves importantly to underscore the legal principle that fiscal accountability for the proper and lawful expenditure of public funds extends beyond the elected head of the financial office to encompass the actions and responsibilities of subordinate personnel operating under the Auditor’s direct supervision and administrative control; ultimately, the elected Auditor bears responsibility for establishing and maintaining the internal controls designed to prevent or detect such errors or improprieties in payroll processing. Status: Official records associated with the audit report indicate that the FFR amount, precisely representing the quantum of the identified illegal overpayment, was subsequently recovered in full by the City through an administrative action, specifically identified within the audit report context as a reduction applied to the individual’s final compensation payout upon her separation from employment with the City, thereby effectuating the complete restitution of the improperly expended taxpayer funds back to the appropriate City fund.

Financial discrepancies and misconduct unearthed in Marion City Auditor’s Office

FY 2007 (Reported 2009):

• Finding: Uncollected taxes receivable exhibited a significant and concerning increase compared to levels reported earlier in the decade, indicating a worsening trend. Amount: $4,400,000. This figure represents a dramatic escalation, nearly doubling the aggregate amount reported as uncollected just eight years prior in FY 1999 ($2.58M). Such a substantial increase in delinquent receivables accumulating within a relatively short timeframe strongly signals potentially worsening challenges within the City’s established revenue collection infrastructure (perhaps related to staffing, technology, or procedures), its administrative processes for effectively pursuing and resolving delinquencies in a timely manner, or possibly reflects deteriorating local economic conditions significantly impacting the ability of residents and businesses to meet their municipal tax remittance obligations promptly. Regardless of the precise root cause or combination of contributing factors, this documented trend posed a significant and growing risk to the City’s ongoing financial stability and its operational liquidity necessary to fund day-to-day services.
• Finding: City debt levels continued their discernible upward trajectory during this period, reflecting either increased borrowing activity by the City or the ongoing accumulation of long-term liabilities. Amount: $26,700,000. This marked a substantial increase (approximately 34%) in the City’s overall reported indebtedness compared to the levels reported earlier in the decade (FY 1999’s $19.9M). This continued accumulation of municipal debt further magnified the annual burden of mandatory debt service obligations (required principal and interest payments) upon the City’s operating budget, potentially further constraining the City’s operational flexibility and limiting its capacity for discretionary investment in essential public services or necessary capital asset maintenance and replacement programs critical for long-term community viability.
• Note: The annual financial audit for this fiscal year was again performed by external accountants engaged contractually by the City, with the resulting report subsequently reviewed and accepted by the Ohio Auditor of State, continuing the formal documentation of these concerning financial trends through established oversight processes.

FY 2008 (Reported 2009/2011 – Transition Period under Auditor Strzelecki Pro Tem / Carr start):

• The state audit encompassing this transitional fiscal year, likely spanning periods under both interim leadership (Auditor Pro Tempore Strzelecki) and the initial assumption of duties by the newly elected Auditor (Kelly Carr), identified several significant internal control deficiencies. These findings appear, based on their nature and timing, to represent either inherited systemic issues persisting from the preceding administration or potentially manifested contemporaneously with the commencement of the subsequent Auditor’s tenure, thereby indicating immediate operational challenges confronting the new leadership upon taking office:

• Finding #2008-001: Inconsistent Transactional Data Entry – Classified by state auditors under professional governmental auditing standards as a Significant Deficiency. State auditors identified through their testing procedures a demonstrable lack of consistency, uniformity, and potentially accuracy in the established methods and procedures utilized within the Auditor’s office for recording routine financial transactions (e.g., classifying revenues, coding expenditures, processing journal entries for adjustments) into the City’s primary accounting systems. Deficiencies of this nature, while perhaps classified by auditors as less severe in their potential immediate impact on the financial statements than a Material Weakness, fundamentally undermine the inherent integrity and subsequent reliability of all derivative financial reports generated from that underlying transactional data. They also significantly elevate the inherent risk that material errors, whether accidental in nature (e.g., misclassification) or potentially intentional manipulations, may occur within the accounting records and remain undetected by routine supervisory reviews or existing automated system controls, potentially leading to flawed financial reporting used for decision-making. Status (as reported in the subsequent FY 2009 audit report): Finding designated “No Longer Valid,” suggesting specific corrective actions were implemented by City management or the Auditor’s office during FY 2009 and subsequently verified by state auditors during the next audit cycle as being effective in fully addressing the previously identified deficiency related to data entry consistency.
• Finding #2008-002: Weak Management of Cash Collections – Classified by state auditors as a Material Weakness. Auditors identified serious, systemic flaws (‘Material Weakness’ under auditing standards signifies a higher level of concern regarding the potential for undetected material financial misstatement compared to a ‘Significant Deficiency’) in the established procedures governing the physical handling, initial recording (e.g., receipting), timely depositing, and subsequent safeguarding of cash receipts collected by various City departments (e.g., payments received over the counter for utility bills, permit fees, fines, licenses, park rentals, etc.). Deficient controls in this highly sensitive operational area, where physical currency or readily negotiable instruments like checks are frequently handled by multiple employees, create significant vulnerabilities and heightened risks related to potential theft by employees or external parties, accidental loss or misplacement of funds prior to secure deposit, unauthorized diversion of receipts for personal use, or misappropriation of public funds before they are securely deposited into authorized municipal bank accounts and accurately recorded within the official financial accounting system. Status (as reported in the subsequent FY 2009 audit report): Finding designated “No Longer Valid,” indicating successful remediation efforts were implemented and verified by auditors as having effectively addressed the material weakness in cash collection controls.
• Finding #2008-003: Weak Controls over Delinquent Income Tax Collections – Classified as a Material Weakness. The state audit revealed specific and significant weaknesses in the internal controls governing the established processes for identifying delinquent municipal income tax accounts, accurately tracking outstanding balances owed by taxpayers, initiating and pursuing appropriate and legally compliant collection efforts (e.g., sending timely delinquency notices, establishing enforceable payment plans where appropriate, potentially initiating legal action or utilizing collection agencies when necessary), and ultimately resolving overdue municipal income taxes, which typically represent a critical and substantial revenue stream supporting the City’s General Fund operations and core services. Ineffective or inefficient collection efforts stemming directly from identified control weaknesses (e.g., inadequate tracking systems, lack of follow-up procedures, insufficient staffing for enforcement) directly and negatively impact the City’s realized revenues, potentially leading to recurring budget shortfalls and adversely impacting the City’s overall financial position and ability to fund services. Status (as reported in the subsequent FY 2009 audit report): Designated “Partially Corrected – Re-Issued in Management Letter,” indicating that while some remedial steps may have been undertaken by City management or the Auditor’s office during FY 2009 in an attempt to address the identified weakness in income tax collection controls, the underlying deficiency persisted to a degree sufficient in the auditors’ professional judgment to warrant continued formal mention to management regarding the remaining risks. The downgrade from a formal numbered finding in the main audit report to a comment within the accompanying management letter typically suggests that the auditors perceived the associated risk of material misstatement as having been reduced but not entirely eliminated to their satisfaction based on their follow-up testing and assessment of the corrective actions implemented.
• Finding #2008-004: Weak Controls over Delinquent Sanitation Collections – Classified as a Material Weakness. Analogous in nature and severity to the finding concerning municipal income tax collections, internal controls over the processes established for identifying, billing, tracking, and collecting past-due sanitation utility billings (which are typically accounted for within a separate enterprise fund intended to be self-supporting) were also determined by state auditors to be deficient (‘Material Weakness’). Such deficiencies likely contributed directly to accumulated revenue shortfalls and potentially growing operating deficits within that specific enterprise fund. Chronic shortfalls in enterprise funds due to poor collection practices could necessitate operational subsidies from other municipal funds, such as the tax-supported General Fund, to cover operating costs or accumulated deficits within the sanitation utility, thereby placing additional, unintended strain on general tax revenues needed for other core governmental services. Status (as reported in the subsequent FY 2009 audit report): Designated “Partially Corrected – Re-Issued in Management Letter,” mirroring the reported status for the income tax collection finding, suggesting similar partial remediation efforts had been undertaken but residual risks related to utility collections remained a concern noted to management.
• Finding #2008-005: Appropriations Exceeded Estimated Resources – Classified as Material Non-Compliance. Statute: ORC § 5705.39. The state audit determined through detailed review of the City’s adopted budget, subsequent amendments, and the Auditor’s certification of estimated resources, that the City Auditor’s office failed in its crucial statutory duty under Ohio law to serve as an effective fiscal check against potential overspending by the legislative body (City Council). Specifically, the audit concluded that the office failed to prevent City Council from enacting appropriations (i.e., legal authorizations conferring the power to spend public funds for specified purposes and up to specified monetary limits) for various individual municipal funds (e.g., General Fund, specific special revenue funds) that exceeded the officially certified estimate of available financial resources anticipated to be received or held within those respective funds during the fiscal year. This constitutes a direct and unambiguous violation of Ohio state law (ORC § 5705.39), a statute specifically designed and enacted by the state legislature with the clear intent to enforce fiscal discipline upon local governments and prevent the occurrence of deficit spending within individual governmental funds by strictly limiting appropriations (spending authority) to realistically anticipated and formally certified available resources. Status (as reported in the subsequent FY 2009 audit report): Designated “Not Corrected – Re-Issued as Finding #2009-006,” signifying a critical failure to adhere to fundamental Ohio public finance law that persisted uncorrected from one fiscal year into the next audit cycle. This indicated either a fundamental inability or perhaps an unwillingness on the part of the City government structure (encompassing both the Auditor’s office responsible for providing accurate resource certifications and potentially the City Council responsible for enacting lawful appropriations based on those certifications) to rectify this serious statutory compliance issue promptly. The persistence of such a finding suggested a potentially serious disregard for state-mandated fiscal controls designed explicitly to ensure the financial stability of local governmental units.

II. Tenure of Auditor Kelly Carr (Approx. FY 2009 – FY 2019)

FY 2009 (Reported 2011):

• The audit cycle corresponding to Auditor Carr’s initial full fiscal year presiding over the office revealed not only the critical continuation of previously identified significant deficiencies (as noted immediately above with the re-issuance of the budgetary compliance finding as Finding #2009-006, indicating an inherited problem remained unresolved) but also the concurrent emergence or continued manifestation of additional significant issues impacting the City’s overall financial control environment and statutory compliance posture, potentially reflecting the significant challenges involved in addressing deeply rooted problems within the existing operational framework and potentially limited resources:

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• Finding: Failure to Obtain Prior Certification of Funds Availability – Classified by state auditors as a Material Weakness. A foundational internal control procedure, explicitly mandated by Ohio law under the stringent provisions of ORC § 5705.41(D) (often referred to as the “certification statute”), which unequivocally requires the City Auditor (or an appropriately designated and authorized deputy within the office) to formally certify, typically through the established process of encumbrance accounting wherein funds are specifically reserved against a valid appropriation line item, that sufficient unencumbered (i.e., not already legally obligated for another purpose) funds are currently available within a valid, existing legislative appropriation before any municipal department head, officer, or authorized agent incurs a financial obligation that legally binds the City (e.g., executing a purchase order for goods or services, signing a multi-year service contract, authorizing payroll expenditures for municipal employees, or entering into significant capital lease agreements), was found by state auditors through their detailed compliance testing procedures to be consistently disregarded or improperly executed as part of the standard operating procedures within the Auditor’s office during this fiscal year. This critical failure in adhering to the legally required pre-audit certification procedure, a cornerstone of Ohio municipal finance law designed to prevent unauthorized spending, substantially elevates the inherent risk of the City incurring illegal expenditures (defined under Ohio law as spending outside of legally established appropriations or in excess of the specific amounts appropriated by Council) and fosters an operational environment wherein uncontrolled departmental overspending can potentially occur without adequate central financial oversight or prior verification of existing budgetary capacity, thereby fundamentally undermining core principles of governmental fiscal accountability and control.
• Finding: Untimely Bank Reconciliations – Classified by state auditors as a Material Weakness. The fundamental and indispensable financial management process of systematically comparing the City’s internal financial records (specifically, the general ledger cash account balances maintained within the City’s official accounting system) against external, independently generated bank statements provided directly by the City’s depository institutions for all active accounts was determined by state auditors, based on their review of reconciliation documentation prepared by the Auditor’s office staff and related procedural inquiries, to be performed neither promptly (i.e., failing to meet the generally accepted best practice standard of completing reconciliations on a regular monthly basis shortly after bank statement receipt, which is crucial to allow for timely investigation and resolution of identified discrepancies) nor with demonstrable accuracy and completeness (i.e., reconciliations that were performed were either found to contain mathematical errors, failed to adequately explain or document reconciling items, or lacked sufficient independent review or supporting documentation to verify their correctness and the validity of adjustments). This significant procedural lapse in executing a core accounting function correctly and consistently critically impairs the ability of City management, the Auditor’s office itself in fulfilling its internal oversight role, and external oversight bodies (including independent auditors performing annual audits and potentially City Council members attempting to review monthly or quarterly financial reports) to detect, in a timely fashion, potential discrepancies such as bank processing errors (e.g., incorrect postings, duplicate charges, unauthorized fees), internal bookkeeping mistakes (e.g., erroneous entries, omissions of transactions, misclassifications affecting cash balances), unauthorized electronic withdrawals or potentially fraudulent check clearings, or other forms of potential fraudulent activity impacting municipal cash accounts. Consequently, this documented deficiency, persisting from prior periods, continued to expose significant public funds held by the City to a considerably heightened risk of undetected loss, material misstatement in financial reporting related to cash balances, or potential misappropriation over extended periods due to the conspicuous absence or ineffective execution of this basic, yet vital, detective internal control.
• Finding: Late Filing of Annual Financial Report – Classified by state auditors as Material Non-Compliance. The City Auditor’s office again failed during this fiscal year (FY 2009) to fulfill the unambiguous statutory obligation, imposed by Ohio law upon all municipal fiscal officers, of submitting the City’s Comprehensive Annual Financial Report (CAFR) – the official, independently audited financial statement package presenting the City’s overall financial position, results of operations, and cash flows prepared in accordance with GAAP – to the Ohio Auditor of State within the legally prescribed 150-day deadline following the conclusion of the fiscal year (i.e., typically by May 30th for municipalities like Marion with a December 31st fiscal year-end). Such delinquency in meeting this critical state reporting requirement not only constitutes a clear violation of Ohio statute but also carries practical negative consequences for the municipality and its stakeholders. Specifically, it impedes timely state-level oversight and monitoring of the City’s financial health and compliance posture by the AOS; it can potentially negatively affect the City’s bond ratings assigned by independent credit rating agencies (such as Moody’s or Standard & Poor’s), which often rely heavily on the timely availability of audited financial statements for their rigorous analyses, potentially leading to higher borrowing costs for the City on future debt issuances; it may impact the City’s eligibility for certain state-administered grant programs or funding allocations that explicitly require timely and compliant financial reporting as a condition of participation or funding renewal; and it demonstrably limits the transparency regarding the City’s actual, independently verified financial condition available to its citizens, policymakers (including City Council members needing timely data for budget decisions), employee groups, vendors, and other interested stakeholders in a timeframe conducive to effective oversight, informed public discourse, and timely decision-making based on reliable financial information.
• Finding #2009-006: Appropriations Exceeded Estimated Resources – Classified again as Material Non-Compliance. Statute: ORC § 5705.39. The practice of enacting appropriations (which represent the legal spending authority granted by City Council through resolution or ordinance) for various individual municipal funds in monetary amounts exceeding the officially certified estimate of available financial resources anticipated to be received or held within those specific funds during the fiscal year, explicitly identified as illegal under state law and designated as an uncorrected finding carried forward from the prior year’s state audit report (Finding #2008-005), persisted without evidence of abatement during Fiscal Year 2009. The recurrence of this significant finding, now spanning at least two consecutive fiscal years and involving a transition in Auditor leadership, demonstrated a continuing pattern of disregard for fundamental state budgetary control requirements within the City’s overall financial administration structure. This failure potentially originated from continued deficiencies within the Auditor’s office (which is typically responsible under Ohio law for preparing the accurate certification of estimated resources presented to Council as the basis for appropriations) and potentially reflected insufficient diligence, inadequate review, or perhaps continued over-reliance by the legislative body (City Council) upon potentially flawed, incomplete, or overly optimistic resource certifications or related financial information provided by the Auditor during the critical budget adoption and subsequent budget amendment processes occurring throughout the fiscal year. This repeat violation signaled a serious, unresolved breakdown in the legally mandated budgetary control framework designed to ensure fiscal responsibility at the local level in Ohio.

AOS Commentary (2009 Audit):

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• This particular audit cycle appears, based upon the unprecedented severity and sheer volume of adverse findings reported by the state auditors, to represent a significant nadir in the documented financial management practices and the overall internal control environment of the City of Marion during the extended period under review. The extensive list of deficiencies identified strongly suggests evidence of widespread, potentially systemic dysfunction existing within the Auditor’s purview and significantly impacting broader city financial operations during this challenging fiscal year:
  *Note: The state audit conducted for Fiscal Year 2010 identified an alarming aggregate of 22 distinct findings relating to various aspects of internal controls, statutory compliance, financial reporting accuracy, and federal grant administration. This quantity was explicitly described by the Ohio Auditor of State within the official report narrative as being clearly indicative of “numerous material control weaknesses and lack of management oversight.” Such an exceptionally high volume of documented deficiencies spanning multiple operational areas strongly suggests not merely the occurrence of isolated human errors or minor procedural deviations, but rather points toward a potential near-complete breakdown of established financial management protocols, fundamentally inadequate internal control structures across multiple critical operational areas, and demonstrably ineffective supervisory oversight concerning critical financial functions falling under the Auditor’s statutory responsibilities and direct operational control. This situation appeared to represent a state of significant fiscal disarray requiring urgent and comprehensive corrective attention from City leadership.
• Finding: Systemic Control & Reporting Failures: Further elaboration provided within the audit context indicated that the nature of the numerous findings reported was characterized by the state auditors as not being confined merely to discrete or isolated operational areas (such as solely impacting payroll processing accuracy or only affecting accounts payable procedure compliance) but rather pointed toward widespread, fundamental weaknesses apparently pervading the manner in which municipal financial operations were generally managed, internally controlled, externally reported upon, and potentially supervised, both within the confines of the Auditor’s office itself and perhaps extending to related financial interactions and reporting processes involving other City departments that interfaced regularly with the Auditor’s office. The identified systemic nature implied that the problems were likely deeply rooted within the City’s financial culture or infrastructure rather than being merely superficial or easily corrected procedural anomalies.
• Finding: Federal Grant Management Issues: The City Auditor’s office, which typically plays a central and critical role in the financial administration, accounting, compliance monitoring, and reporting associated with federal grants awarded to the City across various departments and programs, was found by state auditors (conducting specific compliance testing procedures required under federal Single Audit Act standards for entities receiving significant federal funding) to have failed in its crucial fiduciary responsibility to ensure consistent compliance with the complex and often stringent administrative requirements (e.g., federal procurement standards, detailed time and effort reporting documentation for personnel costs charged to grants), fiscal management standards (e.g., adherence to allowable cost principles detailed in relevant Office of Management and Budget (OMB) Circulars applicable at the time), and programmatic reporting regulations governing the acceptance and utilization of federal grant funds received by the City across various federal programs (examples might include Community Development Block Grants (CDBG) from HUD, transportation infrastructure grants from DOT, public safety grants from DOJ or DHS, etc.). Documented non-compliance in this highly regulated domain carries significant potential financial risks for the municipality. Such failures could lead to adverse administrative actions initiated by federal granting agencies, including formal demands for the repayment of grant funds already expended by the City based upon subsequently disallowed costs identified during audit or federal agency review, and potentially jeopardizing the City’s eligibility to receive future federal financial assistance which is often vital for supporting diverse essential municipal services and significant capital improvement projects, thereby impacting service delivery to residents.
• Finding: Continued Budgetary Non-Compliance: Demonstrating a deeply entrenched and seemingly intractable problem at this point in the City’s history, the established pattern of violating the state prohibition against appropriations exceeding certified available resources (ORC § 5705.39) continued unabated and was again cited prominently as a finding during the FY 2010 audit. The persistence of this specific violation over multiple consecutive years, despite prior audit findings and explicit commentary from the State Auditor, strongly suggested it had potentially become an ingrained operational deficiency within the City’s overall budgetary process, rather than representing an occasional oversight or justifiable emergency deviation, further evidencing a persistent disregard for fundamental state fiscal law governing local government budgeting practices in Ohio and potentially indicating a breakdown in the checks and balances intended between the Auditor and Council.
• Finding: Financial Software Issues (Tyler Technologies/New World System): Chronic, persistent, and well-documented problems associated with the City’s core financial management software system (reportedly implemented circa 2008-2009, thus still relatively new at this point but already exhibiting significant operational challenges) were explicitly cited by state auditors within the FY 2010 audit report as significant contributing factors to the proliferation, and perhaps even influencing the specific nature and complexity, of the numerous audit findings documented during this particularly problematic fiscal period. Specific software-related issues detailed either directly in the formal audit findings or within related management letter comments provided to the City from this era included, but were not limited to: persistent data inaccuracies and documented data integrity issues that corrupted the fundamental reliability of generated financial reports relied upon by City management and Council for critical oversight and decision-making functions; significant processing delays routinely experienced by City staff using the system that hindered the timely completion of essential routine accounting tasks such as closing monthly general ledgers accurately, generating meaningful budget variance reports for departmental review, or processing vendor payments efficiently and avoiding late fees; disruptive system crashes or unexpected software freezes that frequently interrupted workflow throughout the finance department, potentially leading to loss of unsaved transactional data or requiring extensive data corruption reconciliation efforts, and consuming valuable municipal staff time in troubleshooting recurring technical issues and implementing necessary data recovery procedures; inadequate or inflexible standard reporting capabilities inherent in the implemented software package that limited management’s ability to perform effective financial analysis (e.g., sophisticated trend analysis, detailed cost accounting across programs or departments), monitor budget performance proactively and in detail against established appropriations, and restricted the overall transparency and accessibility of financial information available for both City Council oversight responsibilities and general public accountability purposes; and specific, recurring technical difficulties frequently encountered by Auditor’s office staff in performing accurate and timely bank reconciliations due to perceived system limitations in handling complex banking transactions, documented data integration problems between different software modules (e.g., ensuring seamless data flow between payroll, accounts payable, utility billing, and the general ledger), or the necessity of implementing cumbersome and potentially error-prone manual procedural workarounds to compensate for perceived deficiencies in the software’s core design, configuration during implementation, or lack of adequate vendor support. These pervasive software challenges, which reportedly afflicted the City’s financial operations significantly for a number of years following the initial implementation and allegedly prompted other Ohio municipalities utilizing the same specific software system during that era to initiate costly and complex litigation against the vendor citing similar significant performance issues and potentially unmet contractual promises regarding system capabilities, demonstrably and severely hampered the Auditor’s office’s capacity to perform its statutory duties efficiently, effectively, and accurately during this period, and may plausibly have served, whether intentionally or unintentionally, to mask or compound other underlying human errors, inadequate training, or existing procedural weaknesses within the office during this tumultuous period. The documented interplay between potentially inadequate or poorly implemented technology and human operational performance appeared particularly detrimental to achieving sound financial management.
  
  
  
  AOS Commentary (2010 Audit):
• Then-State Auditor Dave Yost expressed unequivocal disapproval and significant professional concern regarding both the sheer volume (an unprecedented 22 findings for Marion) and the apparent severity of the findings documented within the FY 2010 audit report, issuing a strongly worded public statement accompanying the report’s official release to the City and the public: “Twenty-two findings are far too many for any government entity… These findings show a lack of attention to detail and poor management oversight.” His pointed public statement explicitly underscored the State Auditor’s professional assessment, based on the comprehensive audit evidence gathered, that the identified problems transcended merely technical software glitches or isolated employee mistakes; rather, they reflected what was perceived by the state’s chief auditor as a fundamental failure in leadership specifically within the Auditor’s office, demonstrated inadequate operational diligence exercised by staff in performing critical functions, suggested ineffective internal supervision necessary to ensure quality control and compliance, and ultimately indicated a lack of overall management responsibility being exercised for ensuring sound financial practices and consistent statutory compliance within the City’s core financial operations at that time. The commentary strongly suggested a perceived need for significant managerial intervention and potentially structural changes within the office or its oversight.
  
  FY 2011 (Reported 2012):
• Notwithstanding the severe critique articulated by the State Auditor in the preceding year’s comprehensive audit report and the extensive, detailed list of deficiencies identified therein requiring corrective action, fundamental problems related to core financial controls demonstrably persisted without sufficient evidence presented to auditors of adequate or effective remediation having been successfully implemented and sustained throughout the subsequent fiscal cycle, indicating limited tangible progress in addressing the identified root causes of the prior year’s extensive findings:
• Finding: Persistent Bank Reconciliation Deficiencies – Classified again by state auditors as a Material Weakness. State auditors, upon performing their detailed testing procedures and review of internal controls for Fiscal Year 2011, once again identified significant, unresolved flaws characterizing the Auditor’s office’s established procedures for reconciling the City’s numerous municipal bank accounts against independent depository statements provided by the banks. The documented failure to perform necessary reconciliations both in a timely manner (i.e., promptly after month-end statement availability, which is a standard and critical practice for effective cash control and fraud prevention) and with verifiable accuracy and completeness (i.e., ensuring all reconciling items between the book balance and the bank balance are identified, investigated, properly documented, and resolved promptly) continued without sufficient evidence presented to the auditors demonstrating that effective and sustainable corrective action had been successfully implemented and consistently maintained throughout the entire fiscal year. This represented an ongoing, uncorrected ‘Material Weakness’ in a fundamental internal control mechanism, leaving the City demonstrably and continuously vulnerable over multiple consecutive years to the delayed detection, or potentially the complete non-detection, of various types of financial discrepancies. These could include potentially significant bank processing errors, internal bookkeeping mistakes (both accidental and potentially intentional), unauthorized electronic withdrawals or fraudulent check clearings initiated by internal or external parties, or other forms of potential fraudulent activity impacting the substantial public funds held in the City’s various operating, capital project, and fiduciary bank accounts. The persistence of this specific finding over multiple years highlighted a critical unresolved vulnerability in the City’s basic financial control structure.
  
  
  
• Finding: Continued Budgetary Non-Compliance – Classified again by state auditors as Material Non-Compliance. The City Auditor’s office once again failed during Fiscal Year 2011 to ensure adherence to, or enforce compliance with, state budgetary law as specifically codified in the controlling statute ORC § 5705.39. Permitting appropriations (which represent the legal spending authority granted by the legislative body, City Council, typically based on resource estimates provided by the Auditor) to exceed the officially certified estimated resources available for expenditure within various individual municipal funds continued as an established practice within the City’s budgetary process during this year, rather than representing an isolated or justifiable deviation due to unforeseen circumstances. This constituted a repeated ‘Material Non-Compliance’ finding related to a core requirement of state statute governing local government finance in Ohio. The recurrence of this specific statutory violation, despite its explicit identification and criticism in the prior year’s audit, strongly indicated a continuing lack of effective corrective action having been implemented either within the Auditor’s office itself (regarding the accuracy and conservatism of resource certifications provided to Council) or perhaps within the broader City budgetary process involving Council’s appropriation decisions (potentially indicating insufficient independent review or questioning of the resource certifications presented). This suggested a potentially systemic breakdown in adhering to legally mandated budgetary discipline essential for maintaining long-term fiscal stability.
  
  FY 2013 (Reported 2014):
• Note: Although the formal audit report issued by the Ohio Auditor of State for this fiscal year culminated in the rendering of an unmodified opinion regarding the overall presentation of the City’s financial statements themselves (signifying that, in the independent auditors’ professional judgment based on the evidence obtained during their testing procedures conducted under GAGAS, the financial statements, taken as a whole, were fairly presented, in all material respects, in conformity with the applicable financial reporting framework, typically GAAP for governments), the well-documented historical pattern of recurring material weaknesses and material non-compliance findings identified in the immediately preceding years (particularly the period FY 2008 through FY 2011 which showed numerous significant issues) strongly suggests that it is plausible, if not indeed probable, that certain underlying internal control deficiencies and statutory compliance vulnerabilities persisted to some degree within the City’s financial operations during FY 2013, even if they did not individually or in aggregate rise to the level of causing a material misstatement in the final reported financial statement figures for that specific fiscal year sufficient to warrant modification of the audit opinion or formal reporting as a finding under the materiality thresholds applied. It is crucial for users of audited financial statements to understand that an unmodified audit opinion pertains specifically to the fairness of presentation of the financial statements taken as a whole at a specific point in time and should not be misconstrued by stakeholders (such as Council members, administrators, or the public) as certifying the complete absence of any operational weaknesses, internal control inefficiencies, minor compliance deviations, or providing a comprehensive endorsement of the overall effectiveness or efficiency of internal management practices and the underlying control systems. Significant operational risks or less severe control deficiencies may still exist even when the financial statements themselves receive an unmodified opinion, particularly if prior year audit findings were noted as only partially corrected or if the scope of audit testing in certain areas was necessarily limited based on risk assessment and materiality considerations employed by the auditors.
  
  FY 2016 & FY 2018 (Reported 2017 & 2019/2020):
• Note: Similar to the circumstances described for the FY 2013 audit engagement, the official audit reports issued by the Ohio Auditor of State for these subsequent fiscal years (FY 2016 and FY 2018) mentioned the performance of standard compliance testing procedures required under generally accepted governmental auditing standards (GAGAS) but did not disclose specific instances of non-compliance determined by the auditors, based on their specific testing scope performed during those audits and their professional materiality judgments applied under auditing standards, to possess a direct and material effect on the determination of financial statement amounts presented within those particular annual reports. However, it is imperative to note that the comprehensive consideration of internal controls over financial reporting remained a mandatory component of the audit scope under GAGAS throughout this entire period, as auditors are required to understand the entity’s control environment to plan the audit. Consequently, the absence of specific findings related to material weaknesses or significant deficiencies formally enumerated within the final audit reports for these specific years does not necessarily confirm the complete and permanent resolution of all previously identified weaknesses or control deficiencies that plagued the office earlier in the decade (e.g., the issues identified in FY 2008-2011). Rather, it indicates that any remaining control deficiencies, if extant during those periods, either did not meet the established quantitative or qualitative thresholds required under professional auditing standards for formal reporting as significant deficiencies or material weaknesses based upon the specific audit procedures performed and the evidence gathered during those particular audit engagements, or potentially that specific corrective actions implemented by the City had successfully reduced the assessed level of risk associated with those areas below the formal reporting thresholds applied by the auditors in those years. It remains entirely possible that less severe control deficiencies, certain operational inefficiencies, or minor compliance deviations persisted but were not deemed sufficiently material for formal reporting in those specific years under the professional standards applied by the state auditors during those engagements. A “clean” audit report regarding findings does not always equate to perfect operations.
  
  
  
  FY 2018 / Tax Year Filing in 2019 (FFR Issued in 2020 Audit): A significant finding, directly attributable to actions (or, perhaps more accurately, critical inactions regarding the timely fulfillment of federal reporting obligations) occurring during Auditor Carr’s final year serving in the office, emerged and was formally documented by the State Auditor subsequent to her departure from the position, indicating a specific administrative lapse with direct and substantial financial consequences for the City:
• Finding: Finding for Recovery (FFR) – Financial Penalties Resulting Directly from Late IRS Information Return Filings. Statute: ORC § 117.28 (providing the explicit statutory authority for the Auditor of State to issue findings for the recovery of public money determined through audit procedures to have been illegally or improperly expended, including, as interpreted by the AOS, expenditures resulting directly from administrative negligence leading to avoidable penalties). Target: Kelly Carr (legal liability for the recovery assessed post-departure based on her official responsibility as the elected Auditor during the period when the administrative infraction occurred). Amount: $22,500. Reason: This substantial monetary sum represented financial penalties levied directly by the Internal Revenue Service (IRS) against the City of Marion, which the City, as the responsible employer entity, was legally obligated to remit to the federal government. The penalties were incurred solely and directly because the City Auditor’s office, operating under Auditor Carr’s leadership during the relevant timeframe for processing and filing 2018 tax year information returns, failed to file the requisite 2018 federal employer tax information forms (specifically, Forms W-2 detailing annual employee compensation and associated tax withholdings for all City employees, and Forms 1099 reporting payments made to independent contractors and certain other types of reportable transactions) with the IRS by the legally mandated federal filing deadline established for early 2019 (typically January 31st for these forms). The Ohio Auditor of State, upon subsequent review during the course of the FY 2020 audit which necessarily encompassed a review of prior year activities impacting current year finances and compliance, determined that the incurrence of these significant penalties by the City, resulting directly and avoidably from administrative negligence in performing a core, non-discretionary, and time-sensitive governmental reporting function required explicitly by federal law, constituted an illegal expenditure of public funds under Ohio law (as the expenditure served no proper public purpose and resulted directly from a failure to perform legally mandated duties in a timely fashion). Consequently, the amount of the penalty paid by the City using public funds was deemed statutorily recoverable from the public official determined to be ultimately responsible for the failure – namely, the City Auditor serving during the period when the critical filing deadline was missed. This specific incident resulted in a direct, quantifiable, and entirely avoidable cost imposed upon Marion taxpayers of $22,500 stemming purely from a failure within the Auditor’s office to execute a routine, yet essential, administrative task in a competent and timely manner as required by federal law, thereby highlighting the significant financial risks associated with even seemingly mundane administrative lapses within a public financial office.

III. Tenure of Auditor Robert Landon III (January 2020 – October 2021)

BEYOND THE BALLOT: MARIONWATCH INVESTIGATES THE SHADOW WAR OF POLITICAL CHARACTER ASSASSINATIONS –

• Context: Mr. Robert Landon, who had previously served as a member of the Marion City Council, assumed the office of City Auditor in January 2020 amidst the backdrop of the previously documented, long-standing financial challenges and recurring audit findings associated with the office, as detailed above. His transition into the Auditor’s role was not without external complexities. His election campaign in the preceding autumn of 2019 was subject to some public controversy related to the design and distribution of certain campaign materials. A timeline document, apparently prepared by the local Republican Party and included in the source materials, indicates that in late October 2019, shortly before the general election, Mr. Landon and another Republican candidate were involved in distributing campaign materials described by the party chairman as “Republican Sample ballots.” These materials reportedly incorporated artwork or formatting resembling sections of the official sample ballot provided by the Marion County Board of Elections, but highlighted only Republican candidates and included a party disclaimer. This action led to the local Republican Party Chairman reporting the incident to the Board of Elections himself and directing that the materials not be further distributed due to potential concerns about voter confusion or compliance with election laws regarding sample ballot replication. Subsequently, based on the timeline, the City Law Director requested the Marion Police Department initiate an investigation into the matter (referenced as MPD Case 2019-06041). While these events related to campaign activities are separate and distinct from Mr. Landon’s subsequent performance of his official duties as City Auditor, this documented context reflects the potentially contentious political environment surrounding his transition into the Auditor’s office, an office which, based on prior audit history, already faced significant inherited operational hurdles and a need for demonstrable improvement in financial management practices.
  
  
  
  FY 2020 (Error Occurred June 2020 – Jan 2021; Audit Reported 2022):
• This fiscal year, representing Auditor Landon’s first full year in office, was significantly impacted in terms of financial operations and subsequent audit outcomes by the occurrence and eventual discovery of a major operational error originating within the Auditor’s office, occurring within the known context of the office’s historical weaknesses in controls and potentially exacerbated by factors such as personnel transitions or inexperience:
• Finding: Erroneous Remittance of Substantial Federal Tax Payments – Classified by State Auditors, due to its significant monetary magnitude and fundamental nature, as a Critical Error. Amount: Approximately $1,280,000 in aggregate federal employee income tax withholdings (specifically encompassing required employee portions of FICA taxes – Social Security and Medicare contributions – as well as federal income tax withholdings deducted from employee paychecks as mandated by federal law) were systematically and erroneously electronically remitted by the City Auditor’s office, over a sustained period documented by state auditors as lasting approximately seven consecutive months (commencing with payments due for payrolls processed in June 2020 through payments due for payrolls processed in December 2020, with the error reportedly only being discovered internally by City staff in January 2021), to the State of Ohio’s Department of Taxation instead of the correct and legally mandated recipient, the U.S. Internal Revenue Service. This represented a catastrophic failure in the accurate execution of fundamental, high-volume, and critically important payroll tax processing and associated electronic funds transfer (EFT) remittance procedures, an error of significant scale carrying immense potential financial penalties and serious legal compliance consequences for the City as the responsible employer entity required by federal law to make timely and accurate federal tax deposits.
  
  
  Context Provided by Staff Incident Report (Kimberly Hutchison, Feb 2021):
• A contemporaneous incident report, prepared in February 2021 by the specific City Auditor’s office staff member (identified as Kimberly S. Hutchison) who was directly involved in processing the initial erroneous June 26, 2020, federal tax payment that initiated the seven-month misdirection, provides significant contextual detail regarding the specific circumstances reported by that staff member as surrounding the initiation of this major error. The detailed narrative within the report indicates that the staff member responsible for executing the electronic tax payment transaction was relatively inexperienced with the overall payroll process at that specific time, stating explicitly that it was only their second time preparing a full City payroll overall, and importantly, their first instance performing the entire complex process independently (“solo”) without direct supervision or readily available real-time guidance from the regular, experienced Payroll Specialist who was reportedly absent from work due to unforeseen circumstances for two consecutive payroll cycles spanning this critical period. An initial complication reportedly arose during the preparation of the June 26th payroll itself, involving the erroneous inclusion of an apparently inactive former employee (identified within the report as Lori Williams) in the payroll batch generated by the City’s payroll system; this erroneous inclusion consequently necessitated a correction to the calculated total federal tax withholding amount that needed to be remitted electronically for that specific pay period. According to the staff member’s written account, in attempting to rectify this specific batch payment amount within the City’s third-party electronic tax payment software or online portal (referred to within the incident report as “Magic Writer”), the staff member reported inadvertently selecting an incorrect function within the software interface, resulting in the accidental deletion of the entire pre-configured Federal Tax Payment account setup profile within that external system, rather than merely editing or replacing the single incorrect payment batch file as intended. This accidental deletion of the critical account profile, potentially facilitated by unclear software interface design or user error under pressure (the report notes the close physical proximity on the screen of a ‘delete account’ icon, represented visually as a trash can, to an ‘edit’ button function that should have been used), necessitated the immediate recreation of the federal tax payment parameters within the external payment system before the corrected payment for that payroll could be successfully processed and transmitted. The staff member reported promptly contacting the software vendor’s customer support telephone line for explicit assistance with this urgent task and stated they meticulously followed the verbal instructions provided step-by-step by the vendor’s support representative to re-establish the federal tax payment account profile within the Magic Writer system. This process was reportedly conducted while under the direct observation of both Auditor Robert Landon and Deputy Auditor Marden Watts, who were physically present in the office during the support call, suggesting awareness at the highest levels of the office regarding the initial problem and the attempt to fix it. However, crucially, despite the staff member’s stated belief at the time that the account was being correctly configured for federal tax payments as explicitly requested from the vendor support, the recreated account parameter information provided by or entered under the direct guidance of the vendor representative apparently contained critical routing numbers or payee identification information corresponding instead to the State of Ohio’s tax payment system, not the federal IRS system. The staff member further noted within the detailed report observing immediately after the setup that the recreated payment setup screen within the Magic Writer system did not display the expected breakdown between Medicare tax and Federal Income Tax Withholding components as the previous, now-deleted account setup had customarily shown, raising an immediate red flag regarding the configuration. The staff member reported raising this observed discrepancy both with the vendor support representative during the same telephone call (who allegedly indicated, according to the report, that processing the payment without the breakdown should still be acceptable) and subsequently, upon the return to work of the regular, experienced Payroll Specialist (identified within the report as Debbie Wolf), requesting that the experienced specialist investigate the discrepancy further due to the reporting staff member’s own admitted lack of extensive familiarity with the intricacies of the Magic Writer system and its expected displays. The reporting staff member then stated within the report that an assumption was subsequently made that the identified issue regarding the payment setup configuration would be fully investigated and rectified if necessary by the experienced Payroll Specialist upon her return. The staff member reported receiving no subsequent notification indicating otherwise. Consequently, the staff member reported being entirely unaware that the federal tax payments processed electronically subsequent to the June 26, 2020 payroll (spanning the next six months) were being systematically misdirected to the State of Ohio instead of the IRS until formal notification of non-receipt specifically for the initial June 26th payment (amounting to $8,525.80 for that single payroll) was received by the City from the U.S. Treasury Department sometime in December 2020, approximately six crucial months after the initial error in account setup had occurred. The incident report also alluded briefly within its narrative to potential internal friction or communication issues existing within the Auditor’s office at the time between different staff members regarding payroll responsibilities, and noted as a separate issue that insufficient IT system audit trail capabilities were enabled on the City’s systems at that time, which hampered a definitive investigation subsequently requested by Auditor Landon and Deputy Auditor Watts into initial concerns raised about potential unauthorized system access possibly related to the separate issue of the erroneous inclusion of the inactive employee (Lori Williams) in the original June 26th payroll run (an issue which was investigated by the City’s Safety Director as a potential sabotage event but ultimately deemed undetermined due to the lack of sufficient electronic tracking data within the system logs). This detailed contemporaneous account provided by the involved staff member highlights a complex confluence of potential contributing factors leading to the initiation and prolonged non-detection of the major tax remittance error, including potentially inadequate training or insufficient supervision for personnel performing critical, high-risk financial tasks, especially during periods of key staff absence; potential usability flaws or lack of sufficient clarity within third-party software interfaces used for critical functions; possible deficiencies or inaccuracies in external vendor support guidance provided during a critical correction process; documented critical communication breakdowns or lack of effective follow-through within the Auditor’s office regarding identified discrepancies or requests for investigation between staff members; and ultimately, a significant failure in established internal verification processes (most notably, the bank reconciliation process, as later confirmed by state auditors) that allowed the substantial series of misdirected payments to continue entirely undetected for an extended and ultimately very costly period, occurring within an operational environment already known from prior audits to possess significant challenges. Incident report is below.
  
  

• Finding: Causal Link Established by State Auditors to Long-Standing Failure in Bank Reconciliation Process – Identified Internal Control Deficiency. State auditors, in their subsequent formal analysis and official reporting on this significant financial event within the FY 2020 audit report issued in 2022, explicitly identified the long-standing, previously documented (in multiple prior audit reports spanning different Auditors), and apparently still unresolved failure within the City Auditor’s office to perform proper, accurate, and timely bank account reconciliations as a key contributing factor – indeed, cited within official audit documentation as a primary reason – why this massive $1.28 million cumulative federal tax remittance error went completely undetected by the City’s own internal control systems for a period exceeding half a year (from June 2020 to January 2021). A robust and timely bank reconciliation process, effectively executed according to standard accounting and internal control procedures universally recognized as essential for sound financial management, should reasonably have been expected by auditors conducting subsequent reviews (and indeed by City management performing ongoing oversight) to flag either the incorrect destination codes associated with these substantial electronic payments (if such detail was available on the City’s bank statements) or, alternatively, the conspicuous non-clearing of expected payments directed specifically to the IRS (if initiated payment records were systematically compared against actual bank debits) much earlier in the process, potentially within the first month or two after the error began. Such timely detection would have allowed for prompt investigation by Auditor’s office staff or management and immediate corrective action before the cumulative financial error compounded month after month to such a significant and ultimately damaging magnitude. The documented failure of this basic, yet absolutely critical, internal control mechanism, despite its repeated identification as a weakness in prior state audits under previous leadership, was thus directly implicated by state auditors in allowing this major operational error not only to occur initially (due to other factors like the account setup mistake) but, more importantly, to persist entirely undetected for a dangerously prolonged period, thereby highlighting the severe potential consequences of ignoring or failing to effectively remediate previously identified fundamental control weaknesses within a financial operation. This finding underscored the critical importance of effective reconciliation as a primary detective control.
• Finding: Finding for Recovery (FFR) – IRS Penalties & Accrued Interest Resulting Directly from Tax Remittance Error. Statute: ORC § 117.28. Target: Robert Landon III (as the elected Auditor responsible for the office during the period the error occurred and persisted) & his official Public Employee Dishonesty and Faithful Performance Bonding Company (which provides surety insurance coverage to protect the public entity, the City of Marion, against certain types of financial losses incurred due to acts of malfeasance or potentially significant nonfeasance in office committed by covered public officials like the elected Auditor). Amount: $154,399. Reason: This very substantial monetary sum represented the direct, consequential financial damages – specifically encompassing significant penalties assessed by the IRS for the failure to deposit required federal taxes by the statutory due dates and the subsequent failure to pay those taxes timely upon discovery of the error, plus substantial accrued interest charges calculated by the IRS on the delinquent tax amounts over the extended period of non-payment – levied directly against the City of Marion as the responsible employer entity. These significant charges were determined by the Ohio Auditor of State, through detailed audit procedures verifying the direct cause and effect relationship between the remittance error originating in the Auditor’s office and the subsequent IRS assessments, to have been incurred solely and directly as a result of the City Auditor’s office’s failure to remit the required federal taxes correctly to the IRS and within the legally prescribed timeframes during the documented seven-month error period originating in June 2020. The Ohio Auditor of State, applying established legal principles and auditing standards regarding the proper use and expenditure of public funds by governmental entities, formally classified these significant penalty and interest costs imposed by the IRS as “unnecessary expenditures that did not serve a proper public purpose,” thereby rendering them public funds illegally expended under Ohio law and consequently statutorily recoverable from the public official (Auditor Landon) deemed responsible for the underlying administrative error and the critical failure of internal controls within his office that allowed the error to occur initially and, crucially, to persist undetected for such an extended duration leading to the penalties. This single, albeit complex and multi-faceted, incident resulted in a direct, adverse, and entirely avoidable financial impact imposed upon Marion taxpayers exceeding $150,000, stemming purely from a combination of administrative execution failure, inadequate internal oversight mechanisms (particularly reconciliation), and potentially insufficient training or technological safeguards operating within the City Auditor’s office during this period.
• Finding: Significant Delay Incurred in Completion of the FY 2020 AOS Audit – Operational Consequence. The City’s mandatory annual state audit engagement conducted by the Ohio Auditor of State for Fiscal Year 2020 experienced significant and protracted delays in its completion and the subsequent final issuance of the official, unqualified audit report to the City administration, City Council, and the public (the report was ultimately issued in June 2022, well beyond typical statutory or expected timelines for completion). The primary reason cited by state officials and documented within related communications for this substantial delay was the documented inability of the City Auditor’s office, operating under Auditor Landon’s leadership at the time the extensive audit fieldwork was being conducted during 2021, to successfully reconcile the City’s complex array of numerous financial accounts and records – particularly concerning the accurate reporting of cash balances held in multiple bank accounts, various investment holdings, complex interfund transfer activity, and related transactional details recorded across multiple distinct governmental and proprietary funds – to the rigorous standards of accuracy, completeness, consistency, and adequate supporting documentation required by the state auditors conducting the engagement under generally accepted governmental auditing standards (GAGAS). This inherent difficulty in achieving timely and accurate reconciliation of the City’s books, a challenge noted as a recurring theme emerging from reviews of prior audits as well, was significantly exacerbated during this specific audit cycle by the considerable additional effort, complexity, and extensive staff time (required from both City personnel within the Auditor’s office and the assigned AOS audit team) involved in accurately untangling the financial threads, meticulously correcting the necessary accounting entries across multiple periods, and properly documenting the pervasive impact of the $1.28 million federal tax remittance error across numerous affected accounts, funds, and reporting periods within the City’s financial accounting system, all necessary steps to ensure that the final audited financial statements ultimately issued were not materially misstated as a result of this major error. The resulting extensive delay in the audit’s completion consequently hampered the ability of the Marion City Council to exercise timely and effective fiscal oversight based on independently verified, audited financial figures for that critical fiscal year which was significantly impacted by the major remittance error, and simultaneously limited the transparency available to the public regarding the City’s independently verified financial condition and operational results for that period until well into the subsequent fiscal year. Mr. Landon resigned from his position as City Auditor in October 2021, prior to the final completion and issuance of the FY 2020 audit report, citing health reasons related to COVID-19 recovery and also alleging political interference with his office’s functions as contributing factors to his departure.
  
  
  
  
  
  
  AOS Commentary (2020 Audit):
• In direct response to the aforementioned catastrophic tax remittance fiasco and the clearly associated internal control failures identified by state auditors as significant contributing factors allowing the error to occur and persist undetected for so long, the office of the current Ohio Auditor, Keith Faber, included a formal management recommendation within the official FY 2020 audit report issued in June 2022. This specific recommendation explicitly urged the City administration (collectively including the Mayor’s office, the City Council as the legislative body, and the Auditor’s office itself as the primary operational entity involved) to “improve its internal control procedures over withholding remittances and related procedures to help ensure errors are identified in a timely manner.” This official recommendation, carrying the significant weight and authority of the state’s primary financial oversight agency, served to highlight the perceived critical need, from the state’s independent perspective based on the audit findings, for implementing substantive systemic procedural fixes and demonstrably enhancing both preventative internal controls (designed to avoid such errors from occurring in the first place, potentially involving improved training, clearer procedures, better software controls, or enhanced supervision) and detective internal controls (such as more effective reconciliation procedures, exception reporting, or independent reviews designed to identify any errors that do occur much more rapidly after initiation) within the Auditor’s office specifically related to the complex and high-risk processes of payroll calculation, accurate tax liability determination, and secure electronic remittance processing. The recommendation clearly aimed beyond merely addressing the singular, albeit massive, error that had already occurred and caused significant financial damage, focusing instead on the implementation of robust, sustainable measures designed explicitly to prevent the recurrence of similar costly mistakes impacting federal or state tax compliance, or other critical financial processes, in the future, thereby strengthening the City’s overall financial resilience.
  
  

Timeline of Lawsuits Filed Against Tyler Technologies’ New World Software It is important to note that the software vendor used prior to 2022 had multiple lawsuits nationwide:

2014

• St. Joseph County, Indiana: Issues with the New World computer-aided dispatch system led to delays in 911 dispatches. The county considered legal action due to the software’s failure to recognize addresses and other operational problems.

2016

• Alameda County, California: The Public Defender’s office reported wrongful arrests and jailings due to issues with Tyler Technologies’ Odyssey Case Manager software. This led to legal actions against the company.

2017

• St. Joseph County, Indiana: Continued problems with the New World dispatch system resulted in further delays and operational issues. The county explored replacing the system and considered lawsuits against Tyler Technologies.

2018

• Shelby County, Tennessee: Tyler Technologies faced a $4.9 million federal class-action lawsuit for wrongful jailings during the transition to the Odyssey Case Manager software. The settlement included a payout of $816,668 from Tyler Technologies.

2021

• Lubbock County, Texas: Legal issues arose due to problems with Tyler Technologies’ Odyssey Case Manager software. Reports included wrongful jailings, public access to private court records, and difficulties in obtaining discovery from prosecutors.

2023

• Delaware District Court: Racquel Lewis filed a civil rights lawsuit against Tyler Technologies, alleging issues with the company’s software. The case, Lewis v. Tyler Technologies, was filed on March 17, 2023.
  
  This timeline highlights the ongoing legal challenges faced by Tyler Technologies (they still continue to defend their software.) This timeline will illustrate that the Marion City Auditor’s Office has had major problems due to issues with their New World and or Odyssey Case Manager software, dating back to at least   2008, but increasing drastically into the 2008 fiscal year and beyond when the Tyler Technologies system was deployed. These lawsuits reflect the significant impact of software-related problems on various counties and their legal systems.

Technical Feasibility Analysis: Entry of Ohio State Tax ID into Federal Field via Financial Software in Marion City Auditor’s Office (sent to IT experts)

Our reporters composed the following. It was then sent to experts in the information technology field criteria for selection required a specific discipline in deployment of software related systems and protocols including deployment of Payment Card Industry (PCI) standards and practices on a global enterprise I.T. project scale. The below communication was unanimously agreed upon as the acceptable information technology protocol across the board, and raised questions. There are additional references at the end of this article that show how these illustrations of I.T. policies and practices may be used in this context. We encourage you to research this.

Additionally, A few made jokes asking if our own experienced IT staff were “making lists because of our old age, to remember.” This joke is due to the assumed conversation that would arise amongst experts in this field, if asked these questions from other experienced professionals also known to work in this field; because they are indeed industry standards and would more than likely be agreed upon by any expert in such fields.

1. Introduction

Kindly look over the below summary of standard protocols and processes from an I.T. perspective as part of an investigative article. While you may reply at length, a simple agree or disagree will suffice. Unless stated I will not use your names or specific credentials in the report.

This report examines the technical feasibility, from an information technology (IT) perspective, of an operator inadvertently entering an Ohio state tax identification number into a data field designated for a federal Employer Identification Number (EIN) within the financial software systems utilized by the Marion City Auditor’s office. The analysis specifically considers the role of standard software validation controls in preventing such an error, including within potential ancillary systems like “Magic Writer” (identified herein as Magic-Wrighter). The assessment focuses on the technical constraints imposed by software based on the structural characteristics, lengths, and formats of federal EINs versus relevant Ohio state tax IDs. The objective is to determine, based on typical IT controls in municipal financial systems, whether the software itself would permit such a data entry error.

Trial Balance Sheet Landon Administration Showing State of Affairs:

2. Federal Employer Identification Number (EIN) Characteristics

2.1. Definition and Purpose

The Employer Identification Number (EIN), also known as the Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), is a unique identifier assigned by the U.S. Internal Revenue Service (IRS). It identifies business entities for tax administration. An EIN is required for various entities to file tax returns, pay federal taxes, hire employees, open bank accounts, and apply for licenses. Applying for an EIN is a free service via Form SS-4.

2.2. Format and Length Specifications: The Core Technical Constraint

From an IT standpoint, the most critical characteristic of a federal EIN is its rigidly defined structure:

• Length: It is strictly nine digits long.
• Format (Presentation): Typically displayed as $XX-XXXXXXX$.
• Format (Data Entry/Storage): Electronic systems almost universally require or store the EIN as nine numeric digits without the hyphen ($XXXXXXXXX$).

This precise nine-digit length is a fundamental parameter for software validation.

2.3. Validation and Uniqueness

EINs are unique and permanent identifiers for a business entity. While not as sensitive as SSNs , systems processing them employ validation. Incorrect EINs are a common cause of tax filing rejections. Specific prefixes historically denoted location or assignment channel. Modern electronic filing specifications include checks against invalid prefixes. TIN matching against IRS records validates the EIN-name combination.

3. Ohio State Tax Identification Numbers

3.1. Overview of Relevant Ohio IDs

Ohio uses distinct state-level IDs, including:

• Ohio Withholding Account Number (for state income tax withholding).
• Ohio Employer Account Number (10 digits, for unemployment).
• Ohio Vendor’s License Number (format varies).
• School District Income Tax Withholding (uses the state withholding number).

The Ohio Employer Withholding Account Number is most relevant for potential confusion with the federal EIN in payroll or vendor contexts.

3.2. Ohio Employer Withholding Account Number: A Contrasting Format

The Ohio Employer Withholding Account Number, issued by the Ohio Department of Taxation (ODT) , has technical specifications that differ significantly from the federal EIN:

• Length: It is strictly eight digits long.
• Format (Data Entry/Storage): Typically required as eight numeric digits ($5XXXXXXX$), omitting hyphens.
• Prefix Requirement: It must begin with the digit ‘5’ , with some specifications noting valid starts as 51, 52, 53, or 54. A presentation format like $5X-XXXXXXX$ may exist but is secondary to the 8-digit numeric requirement for systems.

3.3. Comparison: Federal EIN vs. Ohio Employer Withholding ID – The IT Validation Challenge

The technical differences are stark and directly impact software validation possibilities:

Feature	Federal EIN	Ohio Employer Withholding Account Number
Issuing Authority	Internal Revenue Service (IRS)	Ohio Department of Taxation (ODT)
Primary Purpose	Federal Tax Identification & Reporting	Ohio State/School District Income Tax Withholding
Length (Critical for Validation)	9 digits	8 digits
Format (Typical System Entry)	$XXXXXXXXX$ (numeric)	$5XXXXXXX$ (numeric)
Format (Presentation)	$XX-XXXXXXX$	$5X-XXXXXXX$ (or similar 8-digit structure)
Character Type	Numeric	Numeric
Key Software Validation Checks	Exact 9-digit length, $XX-XXXXXXX$ format mask, numeric only, potentially invalid prefixes	Exact 8-digit length, must start with ‘5’, numeric only

The mismatch in required length (9 vs. 8 digits) is the most fundamental technical barrier that standard software validation is designed to prevent.

3.4. Potential for Confusion

Despite clear technical distinctions, human error during data entry remains possible due to the similar context (“tax ID”). An operator might manually transcribe the wrong number if not careful or if the software interface is poorly designed.

4. Marion City Auditor’s Office: Operational and Systems Context

4.1. Relevant Financial Processes

The Marion City Auditor manages finances, including Accounts Payable (vendor setup/payment), Payroll (employee/City tax IDs), Local Income Tax Administration, and Financial Record Keeping/Reporting. Accurate handling of tax IDs is essential.

4.2. Financial Software Environment

Public records suggest the Marion City Auditor uses software linked to “New World” (acquired by Tyler Technologies) and potentially “Veritas” for specific functions. Tyler Technologies is a major provider of public sector ERP software. This is distinct from the Marion County Auditor, which uses Software Solutions Inc. (SSI). Analysis must focus on typical Tyler Technologies capabilities.

4.3. Standard Information Technology Controls in Municipal Financial Systems: The Software’s Defense Mechanism

Modern municipal ERP systems, like those from Tyler Technologies , are built with robust IT controls to ensure data integrity. From an IT examination standpoint, the critical controls designed to prevent the entry of an incorrectly formatted or lengthed number (like an 8-digit Ohio ID into a 9-digit EIN field) are field-level validation rules applied at the point of data entry:

• Exact Length Enforcement: This is the most direct and crucial control. A field configured for a Federal EIN should be set to accept exactly 9 numeric digits. Any attempt to enter fewer (like 8) or more digits would be immediately rejected by the software interface, preventing the incorrect data from being saved.
• Format Masks: Input masks (e.g., enforcing $XX-XXXXXXX$ or validating input against a $NN-NNNNNNN$ pattern) serve as a secondary validation layer. An 8-digit number, especially one starting with ‘5’, would fail to match the required 9-digit structure inherent in the mask, leading to rejection.
• Character Type Validation: Restricting the field to numeric characters only is standard but wouldn’t differentiate between the federal and Ohio numbers, as both are numeric.
• Prefix/Range Validation: While less common for EINs than for state IDs, systems can be configured to check for known invalid starting digits (e.g., certain prefixes are reserved or known to be invalid per IRS specifications ). Conversely, a field for the Ohio ID should be configured to validate that the input starts with ‘5’.

Crucially, the effectiveness of these controls depends entirely on their implementation and configuration within the specific software instance used by the Marion City Auditor. While a system like Tyler Technologies provides these capabilities , they must be actively configured and enforced on the relevant data fields.

5. Analysis of “Magic Writer” (Magic Wrighter) Software Potential Role

5.1. Overview of Magic-Wrighter Services

Magic-Wrighter provides electronic payment processing solutions (ACH, payment portals, A2A transfers), not core accounting/ERP functions. They facilitate money movement, including electronic tax payments.

5.2. Data Entry Interfaces and Validation in Payment Systems

Data entry in Magic-Wrighter occurs during setup, payee entry, consumer input, or via file/API import. While payment systems require accurate bank data, validation on identifier fields like EIN might be less stringent than in the primary ERP, especially if data is imported. The documentation doesn’t specify EIN validation rules within Magic-Wrighter’s interfaces.

5.3. Likely Function within Marion City’s Workflow

Magic-Wrighter likely acts as a payment processor, executing transactions based on data originating from the City’s ERP (Tyler Tech/New World). The primary data entry and validation for vendor/employee EINs occur within the ERP. Magic-Wrighter would typically receive and process the data as provided, relying on the ERP’s initial validation.

6. Technical Feasibility Assessment: Can the Software Be Fooled?

6.1. Impact of Number Format Discrepancy on Software

From a purely technical IT perspective, the 9-digit requirement for EIN versus the 8-digit length of the Ohio Withholding ID is the key differentiator that software validation rules are designed to catch.

6.2. Role of Software Validation Rules (IT Scenario Analysis)

The possibility of the error hinges on the software’s configured validation rules for the EIN field:

• Scenario A: Standard/Strict IT Configuration (Expected):

• The EIN field is configured with exact 9-digit length validation.
• Result: Entering the 8-digit Ohio number is technically impossible. The software rejects the input immediately at the point of entry. A format mask adds another layer of rejection.
• Likelihood: Extremely High that this is the configuration, as it represents standard practice for critical financial data fields in robust ERPs.
• Scenario B: Lenient/Incorrect IT Configuration (Highly Unlikely but Possible):

• The EIN field lacks exact length validation (e.g., allows up to 9 digits, or is a generic text field with no length check) AND lacks a format mask.
• Result: An 8-digit number could potentially be entered and saved into the field designated for 9 digits. This signifies a major flaw in system configuration and internal controls.
• Likelihood: Very Low. This would deviate significantly from standard IT practices for financial system setup and data integrity.

Conclusion from IT Standpoint: Properly configured financial software, enforcing standard validation rules (especially exact length), will technically prevent the entry of an 8-digit Ohio ID into a 9-digit Federal EIN field. The error is only feasible if the software’s validation controls for that specific field are deliberately or accidentally misconfigured to be overly permissive.

6.3. Downstream Detection Mechanisms (Secondary IT Controls)

Even if a poorly configured system allowed the initial incorrect entry (Scenario B), subsequent automated processes act as secondary IT controls:

• Electronic Filing Validation: IRS and ODT systems have strict validation rules for file submissions (e.g., W-2s, 1099s). Files containing an 8-digit number in the 9-digit EIN field, or an EIN that doesn’t match agency records, would be programmatically rejected. Ohio’s W-2 specifications explicitly mandate a 9-digit EIN and an 8-digit State Employer ID in separate fields.
• IRS TIN Matching: Automated processes comparing vendor TIN/Name against IRS databases would flag the mismatch.
• Internal System Logic/Audits: Database constraints, reconciliation reports, and internal/external audit software often include checks for data consistency and validity that could flag such an anomaly.

These downstream technical checks make it highly improbable that an error, even if allowed at input due to faulty configuration, would go undetected.

7. Conclusion and Recommendations

7.1. Summary Judgment on Technical Feasibility (IT Perspective)

From an expert information technology examination standpoint, financial software used in municipal settings is typically equipped with field-level validation controls designed specifically to prevent the entry of data that does not conform to predefined formats and lengths. The most critical control in this scenario is exact length validation. Given that a Federal EIN is strictly 9 digits and the relevant Ohio ID is strictly 8 digits, a properly configured financial system would technically reject the attempt to enter the 8-digit number into the 9-digit field at the point of input.

Therefore, the entry of an Ohio state tax number into the federal EIN field is technically infeasible IF standard IT validation controls (primarily exact length enforcement) are correctly configured and active in the Marion City Auditor’s financial software. The possibility only arises in the event of significant misconfiguration or absence of these fundamental data integrity controls within the specific software implementation.

7.2. The Decisive Role of Software Configuration

The definitive answer rests entirely on the actual, specific configuration of the validation rules applied to Federal EIN fields within the Marion City Auditor’s live financial software (likely Tyler Technologies/New World). Standard capabilities exist ; their enforcement is key.

7.3. Recommendations

To confirm the system’s behavior:

Review Internal Controls Documentation: Assess the City’s documented procedures for data entry validation and verification.

Direct System Configuration Audit: Examine the live system’s field properties for Federal EINs. Verify if exact 9-digit length validation and appropriate format masks are enforced.

Controlled System Testing: Attempt to enter 8-digit numbers (and other non-conforming data) into the Federal EIN field in a test environment to observe the system’s rejection or acceptance behavior.

Review Data Interfaces: If data flows to/from systems like Magic-Wrighter, confirm the data validation occurring at those integration points.

*END I.T. QUESTIONS / EXPERT REVIEW*

IV. Tenure of Auditor Miranda Meginness (November 2021 – Present)

• Nature of Issues: This most recent period under review, encompassing the tenure of the current City Auditor, Miranda Meginness (who was initially appointed by the local Republican party central committee to fill the vacancy created by Landon’s resignation in late 2021 and subsequently won election to retain the office), presents a distinct and particularly concerning character within the established historical context of the office’s documented performance challenges over the preceding two decades. It is marked by a troubling and complex combination of factors: evidence suggesting the continued manifestation of significant operational deficiencies, bearing notable similarity in type (though perhaps varying in specific degree or manifestation, such as the particular types of penalties incurred or the scale of potential liabilities) to those chronic internal control weaknesses and statutory compliance issues repeatedly observed and documented during prior administrations (particularly concerning the persistent challenges encountered with achieving accurate and timely bank reconciliations necessary for reliable financial reporting and ensuring consistent, error-free federal tax compliance across multiple complex requirements); overlaid, however, with the emergence of specific, serious, and publicly documented allegations of potential intentional misconduct and possible criminal behavior attributed directly by accusers (including fellow elected city officials), or through reported admissions purportedly made by the Auditor herself during official interactions, internal investigations, or other documented communications related to her handling of city finances. This confluence of apparent ongoing operational struggles, suggesting the potential continuation of underlying systemic weaknesses within the office or its processes, coupled concurrently with specific allegations raising profound questions of potential malfeasance and serious ethical breaches by the incumbent Auditor, creates a uniquely challenging, unstable, and contentious environment for effective city governance, necessitating careful navigation of both operational remediation and potential legal accountability, and significantly impacting inter-branch cooperation and the maintenance of essential public trust in the City’s overall financial leadership and integrity.
  
  
  
  Date Unspecified (Reported 2023/2024): Specific actions or statements reported publicly during this tenure that have generated significant public concern extending well beyond the realm of typical administrative incompetence or unintentional negligence, suggesting instead potential breaches of fundamental fiduciary duty, established ethical standards for public officials, or potentially criminal statutes under Ohio law:

A Quick Look: Marion’s Auditor Office: A Decades-Long Disaster Zone (Full Investigation Coming Soon)

• Allegation/Reported Admission: Misappropriation of Funds & Deliberate Concealment via Miscoding of Expense Transaction. Amount: The specific monetary value associated with the alleged misappropriation of funds has not been specified in the available public reports reviewed for this analysis. Public reports surfaced prominently during 2023 and extending into early 2024, apparently stemming from statements made by the Auditor during official City proceedings (such as transcripts or summaries of City Council meetings where she was directly questioned regarding financial irregularities, or potentially related internal investigations initiated by the city administration), internal municipal communications that subsequently became public record through official requests or potentially unauthorized leaks, or possibly admissions reported to have been made by the Auditor to external investigators or other officials during formal inquiries into her office’s operations, indicating that Auditor Meginness herself admitted to improperly taking or utilizing city funds for purposes not authorized by law or established City policy (an act fitting the general definition of “misappropriation”). Perhaps more critically from both a legal and ethical perspective, these same public reports also indicated an admission by the Auditor to deliberately coding at least one specific expense transaction incorrectly within the city’s official financial accounting system with the specific, stated intent to conceal the true nature of the payment – identified in these reports as being the payment of an IRS penalty previously assessed against the City, likely related to prior tax compliance failures documented herein – from external scrutiny (potentially shielding the potentially embarrassing or problematic penalty payment from routine review by City Council members during their budget oversight function, from the public accessing detailed financial records under Ohio’s public records laws, or from independent external auditors performing standard testing procedures during the course of the annual financial audit). This alleged act of deliberate concealment through the intentional falsification of official accounting records, if substantiated through formal, independent investigation by appropriate authorities and adherence to principles of due process in any subsequent legal proceedings, significantly elevates the nature of the concern beyond simple error, negligence, or poor judgment toward potential fraud and intentional deception designed specifically to mislead or obstruct legitimate financial oversight and public accountability processes required of a public official. Potential Statutes Implicated under Ohio Law by such alleged conduct: ORC § 2921.41 (Theft in Office) – Knowingly utilizing one’s public office or employment, or permitting another to use it, to improperly obtain or exert control over public property or services, either without the consent of the proper authority or beyond the scope of implied consent given the nature of the office; ORC § 2913.42 (Tampering with Records) – Knowingly falsifying, destroying, removing, concealing, altering, defacing, or mutilating any writing, computer software, data, or record, knowing that the person has no privilege to do so, and with the specific purpose to defraud or facilitate fraud.
• Allegation: Falsification of Official Documents/Improper Payments. Amount: Specific monetary amounts associated with the alleged improper payments were not specified in the reviewed source materials providing these allegations. Specific, public claims were articulated, most notably and repeatedly by at least one member of the Marion City Council during public meetings and potentially in other official forums, alleging that the Auditor had engaged in the manipulation or unauthorized alteration of official City ordinances (potentially involving substantive changes purportedly made to legislative documents after their formal passage by the City Council, an action which, if true, would be highly irregular and potentially illegal depending on the nature and intent of the alterations), had authorized or processed payments using public funds which were not properly authorized according to established City procurement procedures, existing contractual obligations, or other specific legal requirements governing such municipal expenditures, and had potentially utilized falsified documentation either to initially justify these allegedly improper payments or to subsequently attempt to cover up the impropriety of these financial actions when questioned by Council members or other oversight entities seeking clarification or accountability. Potential Statute Implicated under Ohio Law by such alleged conduct: ORC § 2913.42 (Tampering with Records), given the specific allegations involving the purported manipulation or falsification of official legislative documents and associated financial transaction records.
  
  During Tenure (Reported 2023/2024): Concurrent evidence indicating the continuation or perhaps even escalation of significant operational failures under the current Auditor, particularly manifesting again in the critical and financially consequential area of federal tax compliance, mirroring the types of issues seen previously under prior auditors but potentially involving larger aggregate monetary sums or different specific areas of complex federal tax compliance requirements:

• Finding/Issue: Accrual of Significant Additional IRS Penalties. Amounts: Reported figures, apparently derived from city financial data disclosed publicly during City Council budget discussions, official municipal communications regarding recent IRS notices received by the City demanding payment, or potentially internal investigative reports related to the Auditor’s office performance under Meginness’s leadership, indicate the accrual of substantial new penalties assessed by the Internal Revenue Service against the City of Marion during her watch, suggesting ongoing compliance challenges. These reportedly include aggregate amounts exceeding $84,000 attributed specifically to late payment penalties assessed for various unspecified federal taxes (suggesting potentially widespread ongoing issues with achieving timely remittance across different types of federal tax obligations beyond just payroll taxes); potential liability exposure estimated by some sources, based on statutory penalty calculations for non-compliance, as reaching a concerningly high figure of up to $394,240 related specifically to documented non-compliance with complex employer reporting requirements mandated under the federal Affordable Care Act (specifically concerning the timely and accurate filing of IRS Form 1095-C for all eligible City employees, penalties for which can be substantial per employee per year if failures are determined to be widespread or persistent over multiple reporting periods); and an additional $70,083.62 documented as representing previously assessed but still unpaid penalties related to federal employer payroll taxes (IRS Form 941), suggesting potential ongoing issues not only with preventing new compliance failures but also with effectively resolving or remitting penalties related to past compliance failures potentially inherited from prior periods or occurring early in her own tenure. The accumulation of such significant additional penalties and potential liabilities, particularly following closely upon the major $154k penalty incurred under the prior administration related to the large remittance error, strongly demonstrates a continuing inability or persistent failure within the Auditor’s office under current leadership to effectively manage the complex and highly deadline-driven responsibilities associated with accurate federal tax calculation, comprehensive reporting requirements, and timely remittance obligations correctly and consistently across multiple diverse compliance areas mandated by federal law. This results in both significant realized financial costs being imposed upon the City (for penalties already paid or definitively assessed by the IRS and requiring payment) and the creation of substantial contingent liabilities (representing potential future penalties still under IRS review, subject to ongoing appeal processes, or related to ongoing non-compliance issues yet to be fully assessed) imposing further significant risk and fiscal uncertainty upon the City’s already strained financial resources. Potential Statute Implicated under Ohio Law, particularly if the pattern of failures across multiple tax types and reporting periods is deemed by investigators or prosecutors, after thorough review of the facts and circumstances, to demonstrate a reckless disregard for known legal duties required of the officeholder: ORC § 2921.44 (Dereliction of Duty) – Recklessly failing to perform a duty imposed by law or ordinance (such as the mandatory duty for timely and accurate calculation, remittance, and reporting of various complex federal taxes incumbent upon a public financial officer), or performing such duty in a culpably remiss manner (i.e., negligence potentially rising to a criminal standard depending on the specific circumstances, the official’s awareness of the requirements, and the degree of disregard demonstrated for known, critical statutory duties essential to the functioning of government).
• Finding/Issue: Controversy Regarding Fire Truck Purchase Financing. Impact: Allegations arose within public discourse and potentially during formal City Council deliberations suggesting that inaccurate financial statements provided by the Auditor’s office during the complex procurement process for a major capital asset acquisition, potentially inadequate financial analysis performed or presented by the Auditor’s office regarding available financing options and their comparative long-term total costs (including factors like projected interest rate fluctuations and total repayment schedules under different scenarios), or improper handling of the intricate financing arrangements themselves by the Auditor’s office during negotiations or closing, pertaining specifically to a major capital acquisition (identified in public reports as a new, expensive fire apparatus representing a significant multi-year financial commitment for the City), resulted in the City ultimately incurring unnecessary or excessive interest costs over the anticipated multi-year life of the associated financing agreement finally secured for the purchase. Such an outcome, if verified through subsequent independent financial analysis comparing the terms of the secured financing against reasonably available municipal financing market alternatives prevalent at the time of the transaction, would effectively increase the total long-term cost of this essential public safety acquisition to Marion taxpayers due solely to suboptimal financial management practices, potentially flawed financial advice provided to the decision-making body (Council), or critical procedural errors occurring during the critical procurement and financing stages managed or significantly influenced by the City Auditor’s office. Amount: The specific quantum of alleged excess interest cost incurred by the City, if any actually occurred as a result of these alleged deficiencies, was not quantified in the available source materials reviewed for this comprehensive analysis.
  
  FY 2021/2022 (Reported 2023/2024): Evidence indicating the persistence of fundamental internal control deficiencies even amidst significant concurrent efforts by the City administration toward technological modernization aimed specifically at improving overall financial operations and reporting capabilities:
  
• Finding/Issue: Continued Bank Reconciliation Problems. An external Certified Public Accounting firm (identified in related public reports and potentially City documents as Veritas), possibly engaged by the City administration specifically to assist with addressing accumulated financial reporting backlogs inherited from prior periods, resolving complex accounting issues arising during the transition to new leadership or new financial systems, or potentially to provide an independent third-party assessment of the City’s overall financial state amidst ongoing public concerns and prior audit findings, reportedly noted in its professional work product or official communications provided back to the City that significant problems associated with accurately and timely reconciling the City’s numerous and complex municipal bank accounts persisted well into Auditor Meginness’s tenure, indicating this core internal control weakness remained unresolved despite both the change in elected leadership within the Auditor’s office and concurrent major investments being made by the City in acquiring and implementing new financial management software. While some of the observed discrepancies during this specific period were attributed, at least in part by some public accounts or statements made by officials, to a separate, documented “software glitch” apparently related specifically to automated interfaces handling utility billing deposit data within the new system (and reportedly distinct from the separate, more serious allegations concerning potential misappropriation involving the deliberate miscoding of unrelated expense transactions), the documented continuation of this fundamental control failure – the inability to reliably reconcile cash – even occurring contemporaneously with concerted efforts and significant financial investment by the City administration to implement entirely new financial management software intended precisely to improve efficiency, enhance reporting capabilities, and strengthen internal financial controls (with the new system reportedly being deployed in December 2022), strongly suggests the existence of deeply ingrained procedural flaws within the Auditor’s office’s standard operating practices that may transcend specific software platforms. It could potentially reflect inadequate staff training on either the old or new systems, insufficient technical capabilities among staff relative to the complexity of the required reconciliation tasks across numerous accounts, or perhaps indicates insufficient management focus and allocation of necessary resources (staff time, training budgets, external expertise) dedicated specifically by the Auditor’s office leadership toward definitively resolving this fundamental aspect of sound internal financial control, despite its recurring identification as a critical weakness contributing to financial risk in numerous prior audits conducted by the state over many years. The inability to perform this basic, essential financial function reliably, even when provided with new technological tools intended to facilitate it, remained a significant operational concern highlighted during this period.
  
• January 2024: Manifestation of significant political fallout reflecting a severe and public loss of legislative confidence in the incumbent Auditor’s ability to effectively perform the duties of the office and maintain cooperative working relationships:
• Action: Subjected to an overwhelming 8-to-1 affirmative Vote of No Confidence formally passed as a municipal ordinance by the Marion City Council. This highly unusual and significant formal action undertaken by the City’s duly elected legislative body, occurring shortly after the Auditor’s dramatic public rescission of her previously announced resignation from office just mere days before it was scheduled to officially take effect, served as a powerful and unambiguous public statement reflecting what the vast majority of Council members, through their collective and near-unanimous vote, perceived as a profound breakdown of trust and confidence concerning the Auditor’s overall operational performance, her demonstrated professional competence in handling the City’s finances, her perceived adherence (or lack thereof) to Council directives or established expectations for the office, and potentially her fundamental integrity and overall fitness to continue holding the critically important elected office of City Auditor responsible for the independent oversight and management of the municipality’s complex finances. Such a formal vote of no confidence, while perhaps lacking direct legal power under Ohio law to immediately remove an independently elected Auditor from office absent further specific legal proceedings (such as a successful citizen recall effort, if applicable, or a criminal conviction for certain offenses triggering automatic removal), carries immense political weight within the community, signals deep and potentially irreparable dysfunction and open conflict in the essential working relationship between key branches of city government (legislative and financial oversight) necessary for effective governance, and likely further damages public perception regarding the credibility, reliability, and overall trustworthiness of the Auditor’s office during a period of already heightened scrutiny and concern.

Marion facing continuing financial woes

Forensic Conclusion:

The cumulative weight of the extensive evidence meticulously documented and analyzed within this comprehensive forensic exposition paints an undeniable, deeply troubling, and ultimately unsustainable picture of chronic fiscal vulnerability afflicting the municipal corporation of the City of Marion. This vulnerability is shown, through a consistent and recurring pattern observed over a period exceeding two decades, to be directly and persistently linked to systemic deficiencies, recurrent operational failures, and documented instances of potential misconduct originating within or directly attributable to the Office of the City Auditor. The discernible pattern, substantiated through numerous official state audit reports issued across multiple audit cycles and involving different auditors serving during this timeframe, is stark, consistent, and extensively documented through objective, independent external review: it encompasses recurring findings classified under professional auditing standards as ‘Material Weaknesses’ in the most essential internal financial controls designed specifically to safeguard public assets and ensure the fundamental integrity and reliability of financial data (such as the basic, yet absolutely critical, discipline of performing accurate and timely reconciliations of all municipal bank accounts); repeated, documented instances of ‘Material Non-Compliance’ with foundational state budgetary laws specifically enacted by the Ohio General Assembly to prevent municipal overspending and enforce principles of fiscal accountability upon local governmental units (particularly the strict appropriation limitations mandated by ORC § 5705.39); and a sequence of significant, demonstrably costly operational errors occurring within the Auditor’s functional domain, including catastrophic failures in critical processes like federal tax remittance procedures which have occurred under successive administrative leadership within the Auditor’s office and resulted in substantial, direct financial penalties being imposed upon the City, thereby diverting scarce resources from intended public purposes.

Crucially, the longitudinal analysis presented herein demonstrates conclusively, based on the multi-year recurrence of similar types of findings across different officeholders and administrative contexts, that these documented lapses have demonstrably not been merely isolated incidents attributable simply to singular human error, specific unforeseen external circumstances impacting operations during a particular year, or the unique failings of a single individual officeholder during a particular electoral term. Rather, they appear to represent a disturbing continuum of administrative and fiduciary failures, potentially indicative of deeper systemic issues within the office or the broader city financial structure. These failures have resulted in direct, quantifiable financial losses imposed upon the City exceeding $178,000 solely through the specific administrative mechanism of formal Findings for Recovery (ORC § 117.28) issued by the Ohio Auditor of State, mandating the restitution of public funds determined through rigorous, independent audit procedures to have been illegally or improperly expended due to actions or inactions within the Auditor’s sphere of responsibility. The true aggregate financial cost borne by Marion taxpayers over this extended period, however, is likely far higher, potentially significantly so, when factoring in the unquantified but undoubtedly substantial additional sums associated with other penalties assessed directly by regulatory agencies (such as the Internal Revenue Service for various complex compliance failures extending beyond those resulting specifically in state-issued FFRs, as documented particularly under the current administration), substantial accrued interest charges incurred on mismanaged funds or necessitated by delayed payments to vendors or other governmental agencies, demonstrably wasted municipal staff time (both within the Auditor’s office itself and potentially within other departments required to provide supporting documentation or respond to inquiries) consumed in the laborious and often redundant processes of identifying and correcting complex errors, reconstructing incomplete or inaccurate financial records to satisfy increasingly rigorous audit requirements, and responding extensively and repeatedly over many years to recurring inquiries and formal findings from state auditors, and the broader, less tangible (yet nonetheless significant and detrimental) operational inefficiencies stemming directly from the reliance by City management and the City Council upon unreliable, untimely, or potentially inaccurate financial data and demonstrably deficient financial management systems for critical public functions such as strategic long-term planning, annual budget development and monitoring, day-to-day operational decision-making, and the effective evaluation of program outcomes and cost-effectiveness over the course of many years. The cumulative impact of these inefficiencies represents a significant opportunity cost for the community.

The severity and persistence of these internally generated problems are further underscored, providing essential external validation of their significance beyond local political disputes, by the critical commentary emanating from successive Ohio Auditors of State (representing different political administrations and distinct audit leadership personnel at the state level over the two-decade period examined), whose official audit reports explicitly highlighted these specific deficiencies year after year and repeatedly, publicly called for improved management oversight practices within the City administration as a whole, enhanced and demonstrably effective internal controls to be implemented and consistently maintained specifically within the Auditor’s office, and the implementation of fundamental, sustainable corrective actions designed specifically to bring the City’s financial operations into consistent and verifiable compliance with state law and generally accepted principles of sound public financial management practice. Furthermore, the chronic, multi-year struggles experienced by the City with its core financial accounting software systems, as consistently documented in state audit commentary and related public discussions occurring over much of this period (spanning multiple software platforms or implementations), appear, based on the available evidence and auditor commentary, to have significantly compounded these existing operational weaknesses. These documented technological challenges demonstrably hindered the generation of accurate and timely financial reports essential for effective internal management decision-making and transparent external accountability reporting, demonstrably delayed the detection of critical errors (most notably exemplified by the $1.28 million federal tax misdirection error, which consequently went unnoticed internally by City management for over six crucial months, allowing the potential financial exposure from penalties and interest to escalate dramatically), and undoubtedly frustrated broader municipal efforts aimed towards achieving enhanced fiscal transparency, improved operational efficiency across departments, and the successful implementation of modern, data-driven decision-making capabilities within various facets of City government operations heavily reliant on accurate and accessible financial information. The failure to effectively manage technology transitions or address long-standing system deficiencies appears intertwined with the human and procedural failures.

Most alarmingly, and adding a profoundly serious dimension to this already troubling historical narrative of protracted fiscal mismanagement originating from a key elected financial oversight office, the analysis of the recent period under the current Auditor introduces unresolved, publicly documented allegations of potential criminal misconduct attributed directly to the incumbent Auditor. These specific allegations, detailed previously within the body of this report, encompass actions potentially constituting serious statutory violations under Ohio criminal law, including statutes defining Theft in Office (ORC § 2921.41), Tampering with Records (ORC § 2913.42), and Dereliction of Duty (ORC § 2921.44). While these allegations, it must be reiterated for clarity and legal precision, necessitate formal, independent investigation by appropriate law enforcement or prosecutorial authorities and potential subsequent adjudication through the established legal system (including adherence to constitutional rights and burdens of proof) to determine factual guilt or innocence according to the high standard of proof required in criminal matters (proof beyond a reasonable doubt), their mere existence, particularly when viewed against the backdrop of the office’s lengthy and well-documented history of operational incompetence and fiscal mismanagement detailed extensively herein, adds a significant and deeply concerning layer of potential illegality and serious ethical breach atop the already substantial and troubling established record of administrative failure associated with this critical public office. These allegations, regardless of their ultimate legal disposition, have undoubtedly further damaged public trust and complicated governance. The political context surrounding certain transitions, such as the documented controversy involving the distribution of potentially misleading campaign materials prior to the 2019 election which brought Mr. Landon into office, may also be considered as part of the complex and sometimes contentious environment within which these significant financial challenges subsequently unfolded, although direct causal links between such specific political events and subsequent, distinct financial errors are not definitively established by the reviewed audit documentation itself. Furthermore, while the provided spreadsheet detailing late fee findings across numerous diverse Ohio public entities confirms that Marion’s incurrence of penalties is not entirely unique within the broader landscape of Ohio local government finance (suggesting compliance challenges can be widespread), the sheer scale of certain penalties incurred by Marion (particularly the $154k finding) and the documented persistence of fundamental control weaknesses (like reconciliation failures) over such an extended period appear particularly noteworthy and potentially indicative of deeper issues compared to isolated instances of late payments elsewhere.

This long-standing, multi-faceted pattern of deficiency, error, and potential misconduct originating directly from the City’s chief financial office has inevitably and severely eroded public trust in the competence and integrity of local government, demonstrably damaged the City’s reputation among peer municipalities, state regulatory bodies, and potentially within municipal financial markets influencing borrowing costs and perceptions relevant to economic development initiatives, and significantly hampered its ability to ensure the sound, sustainable financial footing necessary for the reliable provision of essential public services and the fostering of long-term community development and economic vitality. Effectuating meaningful, substantive, and, critically, lasting positive change moving forward, therefore, necessitates a strategic and comprehensive response extending far beyond the mere reactive remediation of individual audit findings as they periodically arise in future state audit reports or focusing blame solely on the individual holding office at any given moment; it unequivocally demands nothing less than a fundamental, comprehensive, and sustained systemic overhaul of the City’s entire financial governance structure, its day-to-day operational practices and internal control environment within the Auditor’s office and related interacting departments (such as Treasury, Income Tax, and departmental fiscal personnel), and its established mechanisms for ensuring genuine accountability for performance outcomes and consistently effective, independent oversight of all financial operations. Essential, indispensable components of such a necessary and potentially transformative overhaul, designed to address both past failings and prevent future recurrence regardless of personnel changes, must necessarily include, at a minimum: an unwavering institutional commitment, demonstrably originating from the highest levels of City leadership (encompassing both elected officials such as the Mayor and all members of City Council, as well as key appointed administrative personnel like the Law Director and the Safety/Service Director) and permeating visibly and credibly throughout the entire municipal organization’s culture, to establishing, documenting comprehensively in written policies and procedures, implementing effectively through training and resource allocation, consistently enforcing through supervision and accountability measures, and independently verifying through periodic internal audit testing and rigorous external audit procedures robust, effective, and demonstrably functional internal controls across all significant financial processes (including, but certainly not limited to, critical areas such as cash handling and receipting protocols, segregation of duties in procurement and accounts payable processing, accuracy and timeliness controls in payroll calculation and tax remittance procedures, comprehensive compliance monitoring for federal and state grant administration, diligent fixed asset inventory management and reporting, prudent municipal debt management practices including covenant compliance monitoring, and the preparation of comprehensive, accurate, timely, and transparent financial reporting in accordance with GAAP); ensuring rigorous, demonstrable, and ongoing adherence, verified through proactive internal compliance monitoring programs and subsequently confirmed through the findings of independent external audit procedures conducted annually, to all applicable aspects of Ohio public finance law (especially complex budgetary, appropriation, and fund accounting statutes), relevant federal regulations governing the administration of significant grant funds (such as Uniform Guidance requirements), and established governmental accounting standards (GASB) for consistent and comparable financial reporting; investing strategically and adequately, potentially requiring significant reallocation of existing municipal resources or identification of new dedicated funding sources, in reliable, modern, and well-managed financial information systems that provide accurate transactional data capture, robust analytical and management reporting capabilities, strong embedded internal controls to prevent or detect errors, and seamless integration between modules, supported by comprehensive initial and ongoing user training programs tailored to specific roles for all relevant City staff involved in financial transactions or reporting, clearly defined and consistently enforced written procedures manuals for system utilization and standardized data entry protocols to ensure consistency and accuracy, and competent, responsive ongoing technical support resources (whether developed internally or sourced externally) to address system issues promptly and maximize the utility of the technological investment; demanding and rigorously enforcing, through clearly defined performance expectations outlined for the office and its personnel, regular objective performance evaluations where applicable under civil service or collective bargaining agreements (while acknowledging the inherent complexities of formally evaluating an independently elected official’s performance outside the electoral process), potential progressive disciplinary actions where warranted for documented non-performance or proven misconduct by subordinate staff within the Auditor’s office, or ultimately through the informed exercise of the electoral process by the citizenry based upon the transparent reporting of objective performance data and audit results, a significantly higher standard of professional competence (potentially including relevant certifications or continuing education requirements), unwavering ethical conduct adhering to established codes for public officials, demonstrable accountability for achieving defined operational performance outcomes (such as timely reporting and clean audits), and consistently transparent operational practices from all elected financial officials entrusted with the critical stewardship of substantial public funds; and, perhaps most critically for achieving long-term institutional sustainability and preventing the future recurrence of these deeply entrenched historical issues, implementing sustained, informed, proactive, and demonstrably rigorous oversight mechanisms exercised consistently and diligently by all relevant branches of city government – particularly emphasizing the legislative authority, the power of the purse through budget approval, and the inherent fiduciary responsibility for financial oversight vested constitutionally and statutorily in the Marion City Council – designed explicitly and purposefully with the clear, non-negotiable objective to finally break this destructive, deeply entrenched, decades-long cycle of fiscal deficiency, restore demonstrable integrity and operational competence within the City Auditor’s office, ensure consistent statutory compliance across all municipal financial operations, and definitively rebuild justifiable public confidence in the overall financial stewardship and governance of the City of Marion for the benefit of its current and future residents.

The inability for MarionWatch, or the public, to view past unreconciled audits or other relevant data on any public website continues to be a significant point of contention among Marion Citizens. This ongoing lack of transparency serves as a potent reminder of the issues highlighted in this report.

We deeply appreciate the ongoing trust and support of the Citizens of Marion. Without your contributions, we would not have been able to uncover and report on stories of this importance, this thoroughly.

Works Cited (Aside from Auditor of State or otherwise listed above)

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