Columbus –Auditor of State Keith Faber found that the City of Youngstown incurred $4,462,662 in inappropriate expenses from the Water, Sewer, and Environmental Sanitation fund. These monies were directed to private companies for business development in violation of their intended and legal purpose. This activity has resulted in a finding for adjustment.

“Ratepayers expect that the fees they pay for services will be used for their intended and legal purpose. In this case, the City has violated that expectation,” commented Auditor of State Keith Faber. “My office has tried to balance our concerns regarding this misuse of money with the City’s financial condition and were met with a lack of willingness to address these findings. At the end of the day, it is my job to be a watchdog for our tax payers and ensure that Ohioans can trust their local governments.”

During 2017, the City granted and loaned various businesses a total of $4,462,662 with money from the Water, Sewer, and Environmental Sanitation funds. According to the law, these projects should have been funded from the General or the Business Development fund.

One of the loans the city made is scheduled to be repaid, with an outstanding balance of $2,042,042. If payments are on time, the City has agreed to forgive $750,000 of this loan. Assuming the loan balance is paid on time, the finding for adjustment against the General fund and/or the Business Development fund totals $3,170,620 in favor of the Water fund ($1,696,003), the Sewer fund ($1,324,617), and the Environmental Sanitation fund ($150,000).

The Auditor’s office alerted the City of Youngstown more than a year ago that these funds had been inappropriately allocated. Since that time the office has, to no avail, attempted to reach a reasonable resolution with the City. The audit further recommends that the City establish policies and procedures to help ensure expenses are posted to the proper funds.

Auditor Faber will be available today to discuss the audit following the Regional Chamber’s Salute to Business Breakfast. To schedule, please call Allie Dumski at 614-867-1770.

A full copy of this audit report is available online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio is responsible for auditing more than 6,000 state and local government agencies. Under the direction of Auditor Keith Faber, the office also provides financial services to local governments, investigates and prevents fraud in public agencies, and promotes transparency in government.