By Dan Spalding
News Now Warsw
WINONA LAKE — Nearly three months after an Indiana state audit exposed internal problems with Winona Lake government operations, town council still has not determined what to do — if anything — with town employees accused of misusing town money.
Town officials have implemented numerous policy changes to correct issues cited in the report, but residents have called for action against employees who appeared to use town money without formal approval.
Last month, Council President Ashley McGinnis said they would be reaching out to those accused to give them a chance to respond before officials make any decisions.
On Tuesday, McGinnis said they’ve had trouble contacting one of those people and were still attempting to do so.
Exactly when they hope to reach any conclusions on the issue was unclear.
Several current and former employees used money without approval, according to an audit by the State Board of Accounts, which was made public in late June. Town officials were briefed on the contents of the audit before the release and said afterward that they began taking action on some of the matters before the public release.
Many of the biggest concerns highlighted in the audit dealt with shoddy recordkeeping and standard communictions that spanned several years and dated back to the time when the late Kent Adams served as clerk-treasurer.
Much of the misuse of money involved the unauthorized use of town credit cards, including one instance in which a deputy clerk used one while vacationing in Hawaii.
Town Attorney Adam Turner was asked last month to identify who the town is reaching out to, but declined and said that that can be figured out by reading the audit.
Council on Tuesday heard more about plans to amend the town’s employee handbook to clarify policies that came up in the audit. The new policies have not yet been finalized but should be in force by Jan. 1.
The town also approved plans to outsource payroll duties, which had been a sore point for the town.
Cost of outsourcing is expected to be about $2,000 per year, James said.
“We continue to move forward with the audit report in mind, looking to diligently to restore respect to taxpayer dollars while also ensuring that our employees are treated with fairness and clarity,” McGinnis said.
No other town officials had anything to say in public about the matter on Tuesday.
In another matter, town officials were criticized Tuesday over handling of the proposed 2026 budget after it came to light that the council will seek to collect an additional $150,000 from the tax levy that they recently discovered was available.
A hearing on the budget plan was held at Tuesday’s meeting.
Two residents asked about a 35 percent increase in part of the town budget that apparently had not yet been discussed in a public setting prior to Tuesday.
Clerk-Treasurer Heather James said they learned that about $150,000 in additional revenue would be available through the town’s tax levy late in the budget process from a consulting firm, Baker Tilly.
Jim LeMasters, who is familiar with budgeting through his work with Warsaw Community Schools, questioned the town’s methodology.
“I’m just curious about how you build your budget. It sounds like … that you have money and then you go back and look what you’re going to do with it,” LeMasters said.
“At the schools, we do it just the opposite. We have projects we do, and then we set our budget,” he said.
James said they chose to include the additional money in the budget and that they would like to use the money on future projects, which she declined to detail.
“We really didn’t have the time to figure out (how) we were going to use that money,” James said.
