By Rob Alway, Editor-in-Chief
HAMLIN TOWNSHIP — A recent audit of Hamlin Township’s financial accounting practices shows many discrepancies. The audit found several instances in which transactions were not recorded in chronological order, mathematical errors, and significant differences in the balances recorded in the general ledger versus reconciled balances along with bank reconciliations that did not match the bank register.
“This makes it difficult, if not impossible, to determine which set of records is correct,” a statement from the auditor, Lake Michigan CPA Services, PLC of Ludington, states.
The auditor reviewed the accounting records of the township between April 1, 2022 and March 31, 2025.
In some cases, the audit showed error rates of up to 100%.
In the 36 months reviewed, the auditor found there were zero months in which the clerk’s general fund checking register and the general fund money market account register matched the treasurer’s reconciled balances, reflecting a 100 percent error rate. This was also the case for the American Rescue Plan Act (COVID recovery funds) account. In a 20-month review of a certificate of deposit through Preferred Credit Union, bank interested was posted in the wrong month, marking a 65 percent error rate. In 16 months of review of a West Shore Bank money market account, there were 12 months of the interest being posted in the wrong month, marking a 75 percent error rate. Reconciling of two other accounts was performed correctly.
The auditor also discovered instances in which payroll taxes did not appear to have been paid timely. This, according to the report, was an error that was corrected with the appointment of a new clerk.
Several account numbers also had errors. “The township maintained 184 account numbers and we discovered noncompliance with the state mandated chart of accounts with 107 of those accounts, indicating a failure rate of 58%.”
The audit also stated the clerk did not provide monthly reports to the board that reflected balances and budget to actual results.
“The Township does not have a procedures to require documentation or approval for journal entries in the general ledger,” the audit states. “The journal entries that we reviewed in the General Fund checking and General Fund MMA (money market) account did not match what was actually recorded on the bank statements. These entries appeared to be what was needed to maintain a consistent balance in the GF checking, but that was not what was actually maintained in the GF checking or MMA accounts.”
Additionally, the clerk’s general ledger does not include the tax account, which is required by the state.
The auditor made several recommendations to improve the financial record keeping of the township. Those include implementing an electronic record keeping system, require monthly financial reports, monthly comparison of balances between the treasurer and clerk. Additionally, the auditor is recommending the clerk’s general ledger should include all funds, including the tax collection fund and make that information available. There are several other recommendations as well.
The auditor is recommending an outside accountant auditor work with the clerk and treasurer for three months after implementation of the recommendations to aid in balancing bank accounts.
The audit report can be read here.
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