Audit Faults Wis. Sheriff's Keeping of Inmates' Funds

Oct. 19, 2012
Inmate trust accounts controlled by the Milwaukee County sheriff's office are hundreds of thousands of dollars out of whack, and accounting shortcomings are so severe the books can't be reconciled.

Oct. 19--Inmate trust accounts controlled by the Milwaukee County sheriff's office are hundreds of thousands of dollars out of whack, and accounting shortcomings are so severe the books can't be reconciled, according to an audit released Thursday.

"Because of the condition of the accounts, it is not possible to tell if there's any money missing," county Auditor Jerome Heer said. His report says the inmate trust accounts were "virtually un-auditable."

Auditors found a bank balance $420,000 higher than it should be when compared with the sheriff's computerized records on inmate trust funds last March, the report states.

Jon Priebe, who retired in July as fiscal manager for the sheriff's office, said the $420,000 was unclaimed inmate funds that the sheriff's office had not yet turned over to the county treasurer.

Auditors also found $962,000 on the sheriff's books in individual inmate account balances from before 2010. It couldn't be determined what portion of that might still be owed to released inmates, the report says.

All of the $962,000 was returned to inmates when they were released, said Priebe, now a consultant to Sheriff David A. Clarke Jr. The figure came from an old database with corrupted data, Priebe said.

"The auditors managed to run a report off that old system," he said. "Don't worry, the guys got paid out" when they were released, he said. "There's nothing there."

Heer said transactions were never posted closing out old inmate accounts.

"They are open and unreconciled," he said in an email response to a question. "The system is indeed a mess."

Priebe said it was unfortunate that auditors portrayed the $962,000 as an unexplained balance because that may spawn bogus claims on it by former inmates.

"We don't have any complaints," he said. The audit is "just stirring up things for nothing, because there's nothing there."

Money for the accounts comes from inmates at the county jail downtown, the County Correctional Facility-South in Franklin and those with work-release privileges, as well as from their families. It can be used by inmates to purchase snack and grooming products at the jail canteen, to pay for phone calls and for fees related to their incarceration.

Deposits to multiple inmate accounts the sheriff's office had been using totaled $8.5 million in 2011.

Auditors found that some inmate deposits were not properly recorded, money from other sources was inadvertently deposited into the inmate trust account and some payments made from the account were not properly deducted from balances.

The sheriff's staff failed to record bank deposits by inmates over "an extended period," the report says. "Yet unrecorded deposits exceeded $1.8 million at one point," according to the audit.

"The accounting associated with the inmate trust accounts has been in such a state of disarray that fiscal staff has lost track of transaction items that should have been recorded long ago," the report says.

Priebe conceded the problem. He said it stemmed from the merger of the former House of Correction in Franklin (now the south correctional facility) under the sheriff in 2009. Separate inmate account systems -- one for the jail, one for the Franklin lockup and a third for work-release inmates -- continued until this year, he said.

Accounting staff responsible for posting transactions let some of that work slide, expecting a new consolidated inmate trust account system would be established sooner, he said.

The sheriff's office agreed to a series of auditors' recommendations, including processing inmate account transactions promptly, performing account reconciliations monthly, and having separate staff for handling inmate account fund transfers and for accounting of the transactions.

High turnover of staff handling those chores was blamed for some of the problems, according to a letter from Sheriff's Inspector Edward Bailey. Two accountants have been assigned responsibility for doing monthly inmate account transactions, Bailey's letter said.

The problems turned up by auditors in the handling of inmate accounts raise questions about Clarke's management acumen at a time when he's seeking to reverse a $3.3 million cut to his budget for park patrols, said Brendan Conway, a spokesman for County Executive Chris Abele.

"This should be giving people pause," Conway said.

Abele has proposed paying the City of Milwaukee $1.7 million to take over patrols of lakefront and inland parks, as well as additional cellphone 911 emergency calls. Abele says that would produce a $1.6 million savings.

Clarke, who has opposed the plan, did not respond to requests for comment.

Copyright 2012 - Milwaukee Journal Sentinel

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