Continuously serving Kosciusko County since 1854
Indiana State Board of Accounts filed its audit reports Thursday, June 19 on the town of Winona Lake for Jan. 1, 2019, to Dec. 31, 2022, and it found numerous issues, ranging from poor record keeping to misuse of town credit cards and town funds paying for employees’ personal items.
Winona Lake Council President Ashley McGinnis issued a response from the town on Tuesday to address the ISBOA findings.
Clerk-Treasurer
Clerk-treasurers for the town were the late Kent Adams from Jan. 1, 2019, to Dec. 19, 2021; Laurie A. Renier, Jan. 18, 2022, to Oct. 10, 2023; and current clerk-treasurer is Heather James, who has been in the position since Oct. 24, 2023.
In the 90-page supplemental compliance report of the town, it states there were deficiencies in the internal control system of the town related to financial transactions and reporting. The town did not have a properly designed system of internal controls that would have prevented or timely detected and corrected material misstatements to the financial statements.
The lack of a properly designed internal control system resulted in material errors to the financial statements, the report states. Financial and other information are required to be entered annually into the Annual Financial Report (AFR) via the Indiana Gateway for Government Units financial reporting system. The town submitted its AFR in Gateway without an oversight, review or approval process in place to ensure accuracy of the report.
Internal control deficiencies over the AFR resulted in noncompliance with laws and regulations relating to the following AFR components:
• During the audit period, the town had improperly used funds by posting receipts to and disbursements from funds that did not relate to the purpose of the funds. When the town reported the improper fund receipts and disbursements in the financial data component of the AFR, it resulted in the financial statements and combining schedules being misleading and not a true representation of the financial activity of the town.
When the ISBOA performed the audit, they identified 66 receipts in the amount of $794,929 and 308 disbursements in the amount of $2,325,682 that were posted to incorrect funds. For some of the receipts and disbursements, the ISBOA was unable to determine which funds should have been used due to the town not creating funds in the accounting system that were previously established by the town council or the funds being comingled when they should have been separated.
• The ISBOA identified eight grant reports errors in the AFR from 2019 to 2022, ranging from $2,711 for two understated grants in 2022 to $299,692 for two omitted grants in 2021.
• The town did not have documentation to support the amounts reported as accounts payable and received in the AFR.
• The town was required to enter its capital asset information into the AFR at their acquisition value, but instead entered the amounts net of depreciation. The town also did not update additions and deletions for 2022. The town did not properly maintain a ledger of all capital assets owned at their acquisition value.
• The town was required to enter its leases and debt information into the AFR. The town did not properly report its leases and debt information in its 2019, 2020 and 2021 AFRs.
Credit Cards
The town council adopted an ordinance to permit and regulate the use of credit cards, but the town did not ensure the policy was followed and properly implemented.
The ISBOA identified a dozen noncompliances with the town’s policy related to the use of credit cards.
Issuance of credit cards was not properly handed by the town in 2019-22. Maximum limits set by the town council were exceeded for seven out of 27 credit cards for a total of $56,000.
Supervisors and employees did not comply with the town council’s use policies and procedures. The town council approved all credit card charges by approving claims during town council meetings that did not comply with their use policies and procedures.
Supervisors and employees did not return the credit cards to the office of the clerk-treasurer when not in use. The town did not maintain a log of the credit cards use.
Credit cards were used to bypass the accounting system as the town did not implement the use of purchase orders or log the intended use of credit cards to track appropriations.
Payments were made based on monthly statements alone: 23% of credit card transactions did not have proper supporting documentation; penalties and interest were paid in the amount of $1,223; 22% of credit card transactions included the payment of sales tax; 69 credit card transactions included personal expenses or expenses determined to not be related to the functions and purposes of the town.
Personal Expenses
The town council approved the use of public funds by approving claims during town council meetings, including for personal items and expenses not related to the functions and purposes of the town.
The town manager - Craig Allebach - submitted invoices for $250 requesting a dental reimbursement from the town for $205. The town’s dental reimbursement policy only permitted up to $200, but the town reimbursed Allebach $250 on July 21, 2020. Allebach reimbursed the town for $50 on April 24, 2024. He also used a town credit card to make 15 purchases totaling $418 without proper supporting documentation He also reimbursed the town $418 on April 24 and April 29, 2024.
From 2019-22, the deputy clerk-treasurer (Meghan Hawn Lincoln) incorrectly issued 10 checks on March 19, 2019, totaling $2,175 to 10 employees and noted the payments were for an overpayment of insurance premiums, but the employees did not overpay their insurance premiums. It was determined the town under-withheld insurance premiums for six employees. It was determined that the 10 checks issued to the employees were not an obligation of the town.
The deputy clerk-treasurer used a town credit card to make 22 purchases totaling $2,070 from various vendors. There were 19 expenditures that ISBOA was unable to verify were expenses related to the functions and purposes of the town due to lack of written documentation.
Through inquiry, the deputy clerk-treasurer was able to verify that one of the purchases was for gift cards and a second purchase was for an unallowable car rental for a personal vacation in Hawaii. A third purchase was for gas for their personal vehicle but the town’s travel policy doesn’t allow employees to purchase gas for personal vehicles.
The town marshal (Joe Hawn) used a town credit card to make 10 purchases totaling $686 from various vendors. The ISBOA was unable to verify the expenses related to the functions and purposes of the town.
Holly Hummitch has served as the park director since Jan. 1, 2019. President of the Winona Lake Parks and Recreation Dept. Board was Matt Goebel from Jan. 1, 2019, to Dec. 31, 2021; and Kristie Maiers has been president since Jan. 1, 2022.
The report states the park director used a town credit card to make 52 purchases totaling $3,685 for 81 Straight Talk monthly phone service plans within a 65-month timeframe. The park director did not have a town-issued cell phone.
Hummitch used a town credit card to make four annual purchases at Darlington Holiday Warehouse in December 2019-22 totaling $2,015. The purchases were items for Kringle Fest Secret Santa Shop, except for the 2020 purchases that were used to provide gifts to 10 senior citizens. Any money collected from ticket sales in 2019 and 2022 for the Shop were unaccounted for. The ISBOA determined the purchases were not allowable.
Hummitch also used a town credit card to make 18 purchases totaling $796 from various vendors that ISBOA was unable to verify the purposes for. ISBOA recommended the town request reimbursement from individuals for any expenses that were personal.
Compensation & Benefits
The ISBOA selected a sample of 25 payroll checks for testing and found 86 calculation errors within the sample.
Misc.
The ISBOA also listed numerous ordinances, resolutions and policies that the town council adopted that the town did not comply with.
The report also goes over the town’s investments and bank account reconcilations and its errors; cash change and petty cash, including for the Miller Sunset Pavilion and the clerk-treasurer; the TIF report of the Redevelopment Commission; the restricted fund of the Motor Vehicle Highway fund; federal and state agencies compliance requirements; capital assets policy and disposition of assets; and supporting documentation.
The report states the town council should do better in their public meeting minutes.
Renier Response
In a letter dated May 21, 2025, from Renier to the ISBOA, that was included in the report, she states, in part, “When I became clerk, I retained the existing employees including the deputy clerk that the former clerk-treasurer had hired in 2017 to administer all financial obligations of the town, which she continued to do through 2022. Requests I made to learn her responsibilities were ignored and when I began pressing her for answers to some things I questioned, she resigned in December of 2022. When her duties were taken over by other employees, numerous accounting errors were found.”
She then recounts over the next 10 months, the accounting problems grew larger but the council refused to acknowledge the true situation and every request she made for support to resolve any of the issues were denied.
Renier hired her own attorney as the council made public accusations of her not being competent to fulfill her duties, the letter says, but the council refused to accept his representation of her as clerk-treasurer.
She resigned Oct. 10, 2023, leaving the council with a list of some of the issues she and her employees found in the beginning.
The report indicates that the town council had an “obligation” to budget and pay legal fees for the clerk-treasurer in her official duties.
Financial Statements Audit
In the financial statements audit report, the ISBOA notes that the financial statements contain some funds with deficits in cash. This is a result of some funds being set up for reimbursable grants. The reimbursements for expenditures made by the town from those funds were not received by Dec. 31, 2019; 2020; 2021 and 2022.
The cash balance deficits of the funds for ice rink, Economic Development Revolving Fund, local law enforcement forfeiture, OPO grant Winona Lake, Community Crossing Matching Grant, non-motorist grant money from the state and non-motorist grant Winona Lake only are a result of disbursements exceeding receipts and improper use of funds. The total balance for those increased from a negative $130,950 as of Dec. 31, 2019, to a negative $1,262,005 as of Dec. 31, 2022.
The content of the reports were discussed on May 15, 2025, with all parties involved. All reports can be found on the ISBOA website at http://www.in.gov/sboa/.
Council Response
In a response from the town council and clerk-treasurer, provided by Council President Ashley McGinnis, it states, “As president of the Winona Lake Town Council, I want to publicly address the findings of the State Board of Accounts audit covering the years 2019–2022. While the results identified serious deficiencies in internal controls, financial reporting, and compliance procedures, it also offers us a clear opportunity: to learn, to improve, and to build a stronger foundation for the future of Winona Lake.”
The audit identified multiple deficiencies in areas such as financial reporting, grant fund tracking, internal controls, credit card management, recordkeeping and compliance with state reporting requirements, the response states.
“These issues reflect breakdowns not just in policy or process, but in oversight, communication, and follow-through. The responsibility for these shortcomings does not rest on any one individual or office —we accept this together and are committed to moving forward in partnership to correct these issues. While some errors resulted from systemic practices and administrative turnover, we recognize our obligation to establish and uphold proper policies, training, and oversight to setup our employees for success.”
To begin the process of correction, the following immediate actions are underway:
• Implemented full fund review and realignment of accounts to reflect proper use and purpose. Implementation of this has begun under the clerk-treasurer over the past year.
• Review and enforce policy & procedure concerning credit card issuance, use, and documentation. Implementation of this has begun under the clerk-treasurer over the past year.
• Corrected grant fund structure to separately track and report each federal and state grant. Implementation of this has begun under the clerk-treasurer over the past year.
• Proper establishment and oversight of all petty cash and change funds. Implementation of this has begun under the clerk-treasurer over the past year.
• Began uploading all required monthly and annual documents to the state Gateway system. Implementation of this has begun under the clerk-treasurer over the past year.
• Contracting with an outside HR consultant to assist with employee handbook restructuring and will continue this work with a review and realignment of Job Descriptions.
To ensure permanent correction and improved governance, the council will adopt the following long-term measures:
• Creation and adoption of an internal control manual, based on the SBOA Uniform Standards.
• Regular Monthly Audit Compliance Update, to be reviewed publicly at each council meeting over the next 12 months.
• Annual staff training on financial controls and employee handbook during the annual internal control training.
• Annual independent review of financial reports, conducted by a third-party consultant.
• Improved documentation of all public meetings and claims, including credit card statements and receipts, for approval at monthly council meetings.
“While this audit was difficult, it has given us clarity and direction. It does not define us — it motivates us. We are committed to turning this audit into a catalyst for real, lasting improvement. We thank the State Board of Accounts for their thorough review and will report back to the public regularly on our progress. Thank you for your continued trust and patience as we work together to serve Winona Lake with integrity and excellence,” the letter concludes.
