Former Indiana Municipal CFO Embezzled $343K From Township Coffers Due To "Complete Lack Of Checks & Balances"

From the Indianapolis Star on 11/30/2014:

In the wake of a Center Township employee pleading guilty to federal corruption charges, the State Board of Accounts has released an audit that explains how he was able to afford a house, jewelry and exotic vacations on the public's dime while evading detection for four years.

In short, a complete lack of checks and balances.

Alan Mizen, the township's chief financial officer for nearly a decade, had access to blank checks and the authority to write and sign them on his own using an electronic copy of the trustee's signature, the audit found.

He also balanced the books himself and could adjust the city's accounting records without any oversight. He compiled the township's budget and wrote the township's annual financial report.
With a three-member accounting staff, the audit found, some of those duties should have been assigned to Mizen's employees.

"Segregation of duties provides the foundation of good internal control by assuring that no one individual has the capability to perpetuate and conceal errors or irregularities in the normal course of their authorized duties," auditors wrote.

Mizen's "unfettered access to the computer system" allowed him to cut a single check for $343,541.08 to "Attorney's General Clearing Tr" in July 2010, the audit found. He entered a fake invoice into the computer system, saying the money was paid to the state treasurer for court administration, judicial salaries and other fees.

He deposited the money into an account titled "Alan S Mizen DBA Attorney's General Clearing Tr." And then he went on a shopping spree.

He bought a house in Zionsville, a Toyota Tacoma pickup truck and $8,900 in jewelry. He also financed his child's college education and took vacations to the Caribbean and the Cayman Islands, according to the criminal complaint against him.

It's unclear why Center Township didn't have better checks and balances in place. But an attorney for the township said Trustee Eugene Akers has implemented reforms to ensure such wrongdoing doesn't happen again.

"He (Akers) was the one who requested the audit to be performed," said John Lowery, an attorney with Lee and Fairman. "He has made changes since taking office and will continue to make changes as seen to be necessary."

The theft occurred under a prior administration. Lowery said Mizen only worked for the township for about a month after Akers took office.

Mizen, 59, took the CFO position in November 2001 and was terminated in January 2011.

The federal investigation was initiated after a suspicious check was found during a regular examination of Center Township financial records.

Last month he pleaded guilty to federal public corruption charges. He faces up to 10 years in federal prison and up to a $250,000 fine. He also was ordered to repay the money he stole, plus $54,978.41 to pay off the state's investigation costs.

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