Bratenahl misspent $20,000 on wages, liquor, audit finds

Plain Dealer (Cleveland, OH)
BYLINE: Amanda Garrett, Plain Dealer Reporter

Cleveland, OH

Bratenahl misspent about $20,000 of tax money on worker paychecks and booze in 2007 and 2008, according to a state audit that also criticized the village's financial controls.

Most of the squandered money - about $13,600 - ended up in the pocket of former Police Chief Paul Falzone, who retired last February after a Plain Dealer investigation revealed that guns, large amounts of heroin and cocaine and thousands of dollars in cash were missing from the police property room.

Falzone, 64, is scheduled to stand trial next week on charges of obstructing official business and theft in office.

The criminal charges appear to have nothing to do with the overpayment revealed in papers released Thursday by state Auditor Mary Taylor. The charges are rooted in Falzone's failed 2008 bid for sheriff, which prosecutors contend he ran from his Bratenahl office, directing officers to campaign for him while on the job.

Bratenahl Mayor John Licastro said Thursday that the problems revealed in the audit have been addressed.

"Human beings make mistakes . . . you allow them a chance to learn from those mistakes," Licastro said.

"I want to assure everyone that the tax dollars will be reimbursed."

Here's what the state auditor said the village of lakefront mansions, high-rise condos and dead-end lanes misspent money on - along with the mayor's explanation of what happened and how the matter was resolved:

Falzone: A Bratenahl clerk in April 2008 mistakenly paid Falzone a lump sum of $9,767 for wage increases and other police pay that the clerk thought Falzone was owed for the previous three years.

Operating under the same belief, the clerk then adjusted Falzone's future pay, bumping up his twice-monthly salary by $95.45. In December 2008, the clerk mistakenly paid Falzone $1,527 more, believing Falzone was also owed that money.

Licastro said the clerk made an "honest mistake" and that the auditor's office has met with Falzone about returning the money. Falzone's attorney, Roger Synenberg, said Thursday that he was unaware the audit said his client was overpaid.

It is unclear whether Falzone intends to pay back the village, but the auditor's office said Thursday the state attorney general or the country prosecutor could seek repayment.

Holiday pay: A village clerk mistakenly paid seven village workers, including Falzone, about $1,500 in holiday pay.

Licastro again blamed the error on an "honest mistake," adding: "We have full faith in the competency of our staff."

He said everyone but Falzone repaid the money. Falzone, the audit showed, owes $367.65.

Liquor: The village recreation commission - one paid worker and volunteers - spent about $2,000 on wine and liquor for wine tastings, an art show and a retirement party.

Licastro said there is nothing in law preventing municipal governments from spending money on liquor. The Village Council, however, was unaware of a 2003 state auditor bulletin stating that using public money for liquor purchases is inappropriate. He said the council won't repeat that mistake.

People have since donated money to reimburse the village. Licastro said he didn't know who made the donations.

Three upcoming wine tastings will be paid for by donations, he said.

Village accounting: In a letter to the council, Taylor wrote that her office has "not opined on the effectiveness of the village's internal control." But two paragraphs later, she wrote that the problems turned up by the audit reveal "significant deficiencies in internal control over financial reporting."

Licastro said the village has set aside money for the state to return and do a performance audit, examining how the village does business and recommending ways to improve.

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