August 11, 2005
Auditors: We couldn't have prevented embezzlement
by Matthew Perenchio
Nine months after reports circulated about Prescott's finance officer allegedly diverting funds from the city, auditors who had overlooked the books recently commented on the situation - stating there was no way they could have known about it.
Last month, former finance officer Tom Kiewel was found guilty of theft and misconduct of office for using $25,963 of city money to pay for his child support and issuing a $5,000 check to himself for personal use.
A second charge of office misconduct, alleging Kiewel paid himself over $840 in unused vacation and sick time, was dismissed in a plea agreement.
Kiewel reportedly began diverting money from the city for child support in May 2003 and paid himself for unused vacation and sick time in June 2003.
Until now, auditors Virchow, Krause & Company - who audited the city's 2003 finances - have not commented on the charges. But during a presentation of the city's 2004 audit, the matter did come up.
James Murray, a CPA partner with Virchow, Krause & Company, said the incident "makes us look bad" but said there was nothing in the audit that revealed any kind of fraud.
Because Kiewel had major oversight of the city's finances as finance officer and acting city administrator, Murray said Kiewel had covered up any evidence of wrongdoing too well for an auditor to discover it. In even talking with an auditor who specifically worked on Prescott's 2003 audit, Murray said there hadn't been anything unusual.
"If they want to do it, unfortunately it happens," Murray said at the July 25 city council meeting.
Murray further went on to state that Kiewel, who resigned in October 2004, was a "good accountant," noting his absence resulted in auditors needing to record more journal adjustments in 2004 compared to 2003.
"Tom was a good accountant," Murray said. "He was competent in what he was doing; he just wasn't honest."
Murray said auditors very rarely uncover fraud - only about 2 percent of the time - and this is only the second fraud he has been involved with in his 25 years as an auditor.
In fact, Kiewel's activity had not been known about publicly until former council member Gary Holmgren raised questions last October following an anonymous phone call regarding Kiewel and the $5,000 check.
In addition to looking over numbers and entries, Murray said his company does an analytical review and interviews staff of the municipality they're auditing. However, he said an audit does by no means clear a city of fraud.
"The public thinks that because there's an audit there's no fraud," Murray said.
In Virchow, Krause & Company's audit of 2004, Murray said nothing else unusual associated with fraud was discovered, including close looks at any unauthorized checks or credit card use. Murray did state a possibility did exist of missing boat launch money, which the city charges for public access from its marina; Kiewel frequently picked up the money from the launch, which did not always have an attendant on duty.
"He could have been taking that cash and putting it in his pocked," Murray said.
Murray apologized for the fraud occurring but said it is unpreventable sometimes.
"You can do everything right (in trying to prevent fraud), but it doesn't mean it will never happen again."
2004 Audit
Virchow, Krause & Company was hired to do an audit on the city's 2004 finances. Work on the audit, which cost $27,433, was done in February and its findings were presented to the council last month.
Overall, the report noted city books appeared to be in good order, although it noted 11 items that are weaknesses in the city's internal controls, most of which dealt with separation of financial duties to minimize accounting errors and embezzlement.
However, Murray said it is not uncommon for a city of Prescott's size to have employees who have multiple duties. The manpower and funding is simply not there to create specific, one-duty positions.
"Ninety percent of communities get this comment, so you're not unusual in that aspect, but it does carry risk, as you know," Murray said.
One specific area of concern the audit stated is accessibility of the mayor's signature stamp. No one who works with the city's general ledger, payables and payroll records should have access to the stamp.
According to mayor Mike Hunter, the city has been working toward fraud prevention, such as using personal signatures as much as possible. In addition, Hunter said the city is working to have department heads review their individual budgets on a regular basis - thereby having more people looking over city finances.
Of other items, the audit suggested to continue monitoring water utility operations and consider applying for another water rate increase.
To the top
Golf fund raiser has good drive
by Greg Lauser
A total of 94 golfers - up from 80 in 2004 - and 38 sponsors - a 25 percent increase - helped the Prescott Foundation raise money that will help fuel the foundation's future charitable funding of worthy recipients identified by its board of directors.
Tournament director and board member Dwight Kimber, project manager for Glenbrook Lumber Inc. and EdgeBuilder Wall Panels Inc., credited the generosity of area businesses and individuals for making this year's event a success.
"We really appreciate the great support shown by sponsors and participants this year," he noted. "It will enable us to continue the foundation's area-wide support of civic initiatives."
Kimber was awaiting submission of all expenses at press time.
"We're encouraged by the increased participation, so (we) anticipate that total funding realized from the annual tournament will be up from past years, but we don't have a final tally yet," Kimber said.
A foursome from Eagle Point Luxury Condominiums posted the lowest net score in the best-ball scramble event at 15 under par, he said. The team showing the most room for improvement was 10 over par, Kimber said.
The event's $100 green fee included motorized carts, the golf round and the celebration and banquet that evening. Competitors also could contribute $2 per putt for an opportunity to win $20 by sinking a 25-foot putt on the practice green and $3 per chance in closest-to-the-hole contests on par-3 holes to win $10 and become eligible for gift certificates awarded during the banquet.
Sponsorships were available to organizations or individuals who paid
either $150 to sponsor a hole, or $500 if they also had a foursome participate
in the outing. Those sponsoring holes had signs posted with their names
at particular holes and were recognized during the banquet, Kimber said.
To the top
Prescott man has soaring ambitions
by Jessica A. Bronk
Eighteen thousand rivets, at least 2,000 total hours of labor, three kids, one wife and a full time job.
These are the unique ingredients of the everyday life of Prescott resident Robert O'Brien, 55, who spends much of his spare time constructing an airplane in his garage.
O'Brien, who started building his plane in the fall of 2000, has been attracted to aviation since his youth. In 1969 at the age of 18, he became a flight engineer for the Army. His duties consisted of performing maintenance on an assigned airplane to ensure its constant functional condition.
When O'Brien was released from the Army in 1971, he decided to continue his work with airplanes and he attended Instrument Flight Training in St. Paul where he was able to receive his pilot's license.
"(Flying is) just something you keep doing. I just couldn't get away from it it kept pulling me back in," O'Brien said.
O'Brien had initially hoped to take his love of the craft and turn it into a career of flying commercially, but with the end of the Vietnam War in 1975, combined with an abundance of skilled pilots, a job in this field was hard to find.
Robert O'Brien and daughter Abby rivet the body of their airplane. Photo by Jessica A. Bronk. |
Despite never flying as an occupation, O'Brien, who now works at Marathon Ashland Oil as a maintenance engineer, continues to pursue flying as a hobby. He had owned several used airplanes in the past, the last being a Cessna 170, which he sold to gain the money to buy the kit for his two-seater RV8.
"I decided I wanted something a little more sophisticated and faster," O'Brien stated.
He started preparing for the construction of his plane in the summer of 2000 when he built a garage in his backyard exclusively for the plane, outfitted with heating and air-conditioning for year-round capabilities. O'Brien usually aims at working a total of 18-20 hours a week on building his plane.
He noted that there are several advantages to building an airplane from a kit as opposed to buying a manufactured one. Not only can the owner design and maintain the plane, but it is also a great deal cheaper - an estimated $50,000 compared to the possible manufactured price of $200,000. O'Brien is also going to use a car engine, a Mazda rotary, instead of using an airplane engine because it is more cost effective.
"It'll be a little more economical," he said, "but the biggest thing is you can rebuild it yourself; Mazdas are a lot cheaper to rebuild."
A great amount of the work on the plane involves riveting, which he said is how metal airplanes have always been put together. O'Brien first must sand the rough edges of the metal pieces smooth; this is called edging. Then he fits the pieces together and drills a hole for the rivets. And last, the rivets are drilled firmly in place to keep the pieces together.
Riveting happens to be a two-person job, in which case O'Brien usually has his daughter Abby help. Wife Lisa and son Joe also do their fair share of assisting.
Like her dad, Abby, 19, has an interest in flying as well. She has been accompanying her dad on flights since the age of 2 and has been picking up the tricks of the trade since the age of 13, when she began learning to fly.
"He coaxed me into it a little bit," she said.
Abby easily remembered the day she fully consented to learn; it was when the two of them went to view the Siren tornado damage back in 2001. She received her pilot's license when she was 16 and now flies their rented Cessna 172 whenever she gets the chance.
Each summer Robert and Abby go on a camping trip to the Experimental Aircraft Association AirVenture Oshkosh fly-in. At EAA Oshkosh, hundreds of thousands of aviation lovers gather to view the latest aircraft innovations and to listen and chat with the top leaders of the trade. This father-daughter tradition has been taking place since Abby was around age 3 or 4, and when the O'Brien plane is finally completed the duo already plan to travel in it to the fly-in.
Abby stated that she is proud of her dad's accomplishments with his plane "because not many people are motivated to spend their own time building something as large and as complicated as an airplane."
When the RV8 is complete, it will need to be inspected and receive an Air Worthiness Certificate. The certificate is obtained when a plane fulfills its test time of either 25 or 40 hours. As a safety precaution, the plane will need to spend those test hours constricted to certain boundaries within relative proximity to an airport.
Robert has to accomplish 40 hours of test time instead of the usual 25 because of his use of a car engine.
Robert is unsure of exactly when his plane will be completed, but he is hoping that it will be within the next two years, at which time it will be painted a bright and bold yellow.
To the top
County's Century Farms honored at fair
by Greg Lauser
Some 60 farm families who have played a crucial role in the agricultural and economic vitality of the area were honored Sunday, Aug. 14 by the Pierce County Fair Committee for continuously operating Century Farms within their families.
Fair director Ann Webb noted that there are 105 Century Farms in the county, and those families who chose to be recognized were honored during the grandstand ceremony. Certificates of appreciation were presented to each family.
Billy and Harriet Anderson, Beldenville, and Sylva Anderson, Spring Valley, also were honored earlier in the week at the State Fair in West Allis as 2005 Century Farm owners. Although they share the same family name, Harriet and Sylva said the two families are not related.
Beldenville Farm
Harriet Anderson and her three daughters - Becky Rasmussen, a personal loan officer for a bank in Baldwin; Kristie Sotona, a registered nurse; and Kathy Voeltz, a banker in Minneapolis - attended the ceremony at the State Fair.
Harriet's father, Frank Moran, bought the 80-acre beginning of the family farm in 1905 from the Gilman family, for whom Gilman township was named.
In 1930, a tornado wiped away all the farm buildings and Harriet's mother was injured, so the Moran family moved to El Paso. They owned a general store there for many years at the junction of County Roads N and G, while rebuilding and continuing to operate the farm. The barn was rebuilt the same year, and other buildings were rebuilt over succeeding years.
Billy and Harriet moved to the farm in 1953, after he returned from military service. The farm currently totals 300 acres - primarily raising corn and alfalfa and milking 90 dairy cows.
"We raised eight children there - three girls and five boys - and our two youngest sons, Brett and Mark, currently operate the farm," she said.
Recent health problems have prevented Billy from remaining active on the farm.
Among their other sons, Greg is a draftsman, Brad is a heavy equipment operator and Jeff farms separately.
Spring Valley Farm
Sylva Anderson's parents, Adolph and Katherine Swenson, purchased the 150-acre family farm June 6, 1905, from Elias Jenson. They lived in the buildings on the place - which included a blacksmith shop - until building a new barn in 1919 and a new house a year later.
Adolph cleared the land by hand, using horse teams, saws and chains to cut trees and uproot stumps, Sylva said.
"Everyone said he did the work of three men, working hard to establish tillable land," she said. "I remember we burned the tree stumps in the furnace, and it got so hot we had several chimney fires."
Sylva said her parents added another 80 acres to the farm, buying the land from Hans Wahl - her maternal grandfather. Sylva said her great grandfather Peterson originally homesteaded that land before Wahl owned it.
"As one of my sons said recently, 'Being a Century Farm means a hundred years of picking rock'," Sylva noted. "They just keep coming to surface on our farm."
Sylva and her husband, Allen, bought the farm from her mother in October 1956. They rented the farm and cropland to others for two decades and moved from a home in Spring Valley to the farm in 1976.
Allen was a long-time elementary principal at Spring Valley schools and was mayor of the town when a big flood occurred in 1942. He and Sylva met and married while both were involved in education. Sylva taught fifth and sixth grades in Spring Valley and sixth grade in Baldwin-Woodville. Both retired from their education careers in 1991. At that time, Allen was an education instructor and supervisor of student teachers at the University of Wisconsin-River Falls; Sylva was a sixth-grade teacher in Baldwin-Woodville. Allen died in June 2003.
Today, sons Jon and Steven run the 320-acre farm while pursuing their own careers in education. Jon teaches mathematics at Hudson High School and Steven is a fifth-grade teacher at Westside Elementary in River Falls. The one-time dairy farm now breeds and raises registered Shorthorn beef cattle and grows field crops that support the cattle operation - corn, oats and alfalfa for hay.
More Century Farms
The other 58 Pierce County farms and families honored included: Glen and Helen Abel, Plum City; Anders Family Trust - Dale and Erin Langer, Ellsworth; Marvel Anderson, Ellsworth; Algot Anderson, Beldenville; Wayne and Rochelle Anderson, Bay City; Robert K. and Kathleen M. Bennett, River Falls; Jeff Benson, Prescott; Dean Bergseng, River Falls; Walter and Carol Betzel, River Falls; John and Bessie Birkel, Ellsworth; Larry and Sandra Borgerson, River Falls; Brian and Kim Borgerson, River Falls; Wendell and Annette Borgerson, River Falls.
Additional honorees were: Charles F. Conroy, Bay City; Myron Leonard Country Hill Inc., Ellsworth; Jerry and Judith Edgar, River Falls; David and Diana Esterby, Bay City; Leon Fiedler, Prescott; Gail, Thomas and Bruce Gunderson, Spring Valley; Glen and Vena Hannack, Spring Valley; C. Edward and Betty Hanson, River Falls; Mary L. Hanson, Baldwin; Lorne Hanson, Baldwin; Randolph and Florence Hanson, Beldenville; The Harvey Family Trust - Milo and Lorraine Harvey, Maiden Rock; Reuben and Flora Hauschildt, Ellsworth; Carl Hendrickson, Beldenville; Joyce, William and Robert Herbison, Plum City; Edward Holdorf, Ellsworth; Paul and Barbara Huppert, Hager City.
Others recognized were: Gehart Iverson, Ellsworth; Jacobson Farm - Mike
and Heidi Jacobson, Spring Valley; Melvern and Marvin Janisch, Ellsworth;
Clair and Anna Janisch, Ellsworth; Kopp's Ono Acres Inc. - Janet Kopp family,
Maiden Rock; George Krauss, Ellsworth; Monica and John Krings, Arkansaw;
Duane and Julie Kuesel, Spring Valley; Galen and Laurie Lundgaard, Beldenville;
Charles and Linda Morrow, River Falls; Jack and Barbara Noll, Bay City;
Duane and Theresa Odalen, Ellsworth; Keith and Sandi Olson, River Falls;
Harley and Matilda Rudesill, Baldwin; Audrey W., Ann B. and James Samuel,
Ellsworth; Kevin and Judy Shella, River Falls; Shirley Sitz Family Trust,
River Falls; Edwin and Merle Sjostrom, Maiden Rock; Norman Sorenson, Maiden
Rock; Joel Stark, Spring Valley; Vernon and Nellie Stogdill, Bay City; Swanson-Cobian
Farm LLC, River Falls; Harold Thompson, Spring Valley; Bryan Thoner, Ellsworth;
Allen E. Webb, Spring Valley; Elizabeth J. Webster - Ronald Webster and
son; Ellsworth; Tim and Jody Wiff, Spring Valley; and Lloyd Yanisch, Ellsworth.
To the top
City spends over $5,000 so far on Lake Street saga
by Matthew Perenchio
The city of Prescott has spent over $5,000 in attorney fees as it continues to move forward in finding some type of resolution with the turnaround at the end of Lake Street.
As of Aug. 9, the city has paid the Hudson-based law firm Mudge, Porter, Lundeen & Seguin $5,188.83 for representing the city in the turnaround case, according to city hall records.
The case, a dispute between the city and a landowner on who has rights to a turnaround that also functions as a driveway, was scheduled for a motion hearing in Pierce County Circuit Court on Wednesday. A court trial is set for Oct. 4.
The situation regarding the contested piece of property has been on-going since the spring of 2003 when Gary and Kim Holmgren purchased the property located at 1030 Lake St.
Lake Street comes to a dead end but has a loop that allows vehicular traffic to easily turn around without stopping. A portion of the turnaround also functions as a driveway to the Holmgren residence, and they have used it as such, occasionally blocking it off with parked vehicles.
A number of citizens who frequently drove on Lake Street were then unable to continue to use the turnaround and called city hall to complain.
The city attempted to negotiate an amicable resolution with the Holmgrens, although no deal was reached. Last December, the city filed a civil complaint against the Holmgrens, asking for a declaration stating the turnaround is a public street.
Because Gary Holmgren was a city council member at the time, the city hired an outside attorney to handle the matter.
The case could be thrown out as early as this week, though. Warren Brandt, one of the attorneys representing the Holmgrens, has filed a motion for summary judgement to dismiss the case, which was scheduled to be heard on Wednesday.
Brandt said he still contests the city does not have rights to the portion of the turnaround that functions as the Holmgrens' driveway. In addition, Brandt states that Lake Street, in fact, actually extends further north past the turnaround, claiming there is no need to even have the turnaround in the "middle" of the road.
Mayor Mike Hunter, though, said the city believes it still has rights to the turnaround because the public has used it for over 50 years and the city has maintained it.
"Our attorneys contest that it's not an issue of ownership, it's an issue of use," Hunter said. "We're just going by what our attorneys tell us."
Should the case not be dismissed, a court trial is set for October. However, Hunter said a mediation is scheduled for late August - one last effort to attempt to come to a resolution before it goes to trial.
Hunter said a possible resolution for the city might not simply consist of it getting full use of the turnaround but rather an agreement that would be amicable to both sides. He said that may consist of more signage and a speed bump to slow traffic down to protect the Holmgrens in their driveway, but all options would be explored.
Brandt said he doesn't believe the money the city has spend thus far on attorney fees has been wise.
"Their money hasn't been well spent," he said.
Gary Holmgren agreed, noting he has spent between $20,000-$30,000 on attorney fees between Brandt and Harry Sieben. He said he plans on being reimbursed by the city.
"I'm going after them for it," he said. "They're just wasting taxpayer money.
"I'm just glad we're going through the court system now. I've got faith in the justice system."
Hunter, on the other hand, feels the city's money has been well invested in pursuing the matter. He said the city attempted to come to a resolution before additional attorneys got involved but was unsuccessful.
"I guess in this case if the only way it's going to be resolved is through legal course, it's been something we've had to do," Hunter said.
Hunter added that the city might also have the option of recouping its legal expenses, but that would be something discussed at a later time.
To the top
Home - The Front Page - News - Letters to the Editor - News From the Past - Legals/For the Record- Classifieds - School News