By Liz Moomey
liz.moomey@salisburypost.com

LANDIS — As the State Bureau of Investigation began its embezzlement probe into this south Rowan town, town staff were in contact with members of the State Treasurer’s Local Government Commission to get the town finances back on track.

After Kenny Isenhour, Landis police chief, was named interim town manager on Feb. 4, the commission contacted Isenhour two days later and sent a follow-up email the next day — Feb. 7 — with a list of nine items the town should consider and work toward solving.

That email, which the Salisbury Post obtained through an open-records request, questions the status of the final, corrected audit for the 2017-18 fiscal year, the status of latest bank reconciliation and the status of the town credit cards as well as other electronic purchasing mechanisms, including the final credit card expenditure reports from resigned staff.

It was the same day — Feb. 7 — when the town announced the State Bureau of Investigation had begun an embezzlement investigation and that Town Manager Reed Linn and Finance Office Ginger Gibson had resigned. Linn had originally planned to retire in March.

The Feb. 7 email from CPA David Erwin at the commission also recommends what to do if other staff members resign, stating “For any management or staff that leave the town, you need to make sure that their access to town accounts and books is severed. If the financial officer leaves, you must have an interim financial officer immediately be named so that the town may continue to conduct business.”

And it was Deputy Police Chief Roger Hosey who was appointed financial manager on Feb. 15.

In an interview with the Post, the LGC was unable to discuss specifics about the town of Landis or the Feb. 7 email due to the ongoing SBI investigation. Greg Gaskins, the LGC’s deputy treasurer and secretary, said the LGC was put into place by the state to ensure municipalities are appropriately handling its finances and to offer help or training.

Gaskins said the commission will reviews a town’s audit for the fiscal year and also state and federal reports associated with a loan. The LGC also looks into a municipality’s finances if something is reported from a citizen, council member, town staff member or the commission itself. The commission has an obligation to inform the local authorities if they believe a criminal act has taken place, Gaskins said.

The municipality, if the LGC has financial concerns, will be placed on a published unit assistance list, which tracks internal control issues, financial issues in the general fund and financial issues in the water/sewer fund. Based on 2017 audited financial statements and as of October 2018, Landis was on the most recent list as a “moderate risk” for internal control issues and financial issues in the general fund. It was a “low risk” for its water/sewer fund. Landis’ status, according to the assistance list, made no progress from the previous year.

The LGC and Landis have been communicating to improve the town’s finances, including the commission visiting the town on Feb. 13. The LGC has plans to revisit the town in March as well.

The town plans to begin its budget planning on March 28 and, Isenhour said, it will be a zero-base budget due because of citizen concerns about individual line items. That means town departments must show exactly what they need to have and what they want to have for the 2019-20 fiscal year.

Isenhour said the town is working to submit the 2017-18 final audit as requested by the LGC.

The town has already addressed one of the commission’s items regarding the status of the water/sewer system. The Board of Aldermen received a report from Gary Flowers of Municipal Engineering who recommend improvements to the town’s sewer system that is in poor condition. 

Other questions

But other questions still linger about the town of Landis’ finances and operations. Isenhour said citizens as well as the Local Government Commission has raised concerns about the familial relations of employees.

Gibson’s mother, Elizabeth Ridings, is a customer service representative and was hired February 2013. Gibson’s sister-in-law, Tara Johnson, is an office assistant and began working for the town November 2009. Linn’s cousin, Brandon Linn, who is current assistant town manager, began his employment with the town in September 2007.

Meanwhile, the town’s personnel policy — drafted in November 2013, after the hiring of those in question — states, “The town prohibits the hiring and employment of immediate family in full or part-time positions within the same work unit if such employment would result in one family member supervising another or if one member will occupy a position of influence over another member’s employment or any condition of employment.” It goes on to define immediate family, which includes parents, spouses and in-laws.

Isenhour said, though the town can’t rewrite the past, it will interview and hire the best candidate for jobs currently open.

Transparency tab

The town of Landis has continued to post responses to open-records requests under its “Transparency” tab, accessible at townoflandis.com/transparency.

The town also recently updated and increased the salaries for Brandon Linn and Johnson following an open-records request by the Post for personnel files. And Isenhour said the town will continue to update the transparency section as they discover new information.

On a salary document published in February, the town listed Brandon Linn’s salary at $43,425. He actually makes $48,660.80. Johnson’s current salary is $38,778, not the $37,280 previously published.

The Post also requested the personnel file for former Parks and Recreation Director Andrew Morgan, who resigned from the town on June 29, 2018, according to town documents.

Morgan was included in the town’s previous salary document published on the transparency tab, despite being unemployed from the town before the start of the 2018-19 fiscal year — July 1.

Interim Finance Officer Hosey said, “When we initially compiled the FY18-19 salaries spreadsheet, we did so by aggregating employee names and salaries from the each departments’ salary budget. Andrew Morgan was listed by name in the FY18-19 Parks & Recreation budget, which resulted in him being listed in the FY18-19 salary spreadsheet.”