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Auditors must perform their task in East Union Township

Published February 22. 2010 05:00PM

A Schuylkill County judge resolved a dispute between East Union Township supervisors and the township's elected auditors over payment of attorney legal fees.

As to the major issue between the two parties concerning auditing the township's finances for 2008 the judge ruled the auditors were obligated to perform the task because the township had not hired an independent auditing firm and urged the parties to resolve the dispute.

Judge Jacqueline Russell ruled on the petition of Atty. Paul Domalakes, who was appointed by the county court to act as solicitor for the auditors, to be compensated for his service because the supervisors refused to pay him. The supervisors were ordered to approve at their next meeting the payment of $120 per hour for costs he incurred.

However, the request by Domalakes that his services be terminated because the supervisors have hired an outside auditing firm to perform the municipality's 2008 fiscal year audit was denied. The supervisors had refused to pay Domalakes the bills he presented telling the court "the bills did not precisely detail the work that he performed and that anything he did after the township had informed the auditors that all the information that they needed to do the audit was available for them before the court had appointed Domalakes."

Russell ruled that Domalakes remain as counsel for the board of auditors until the dispute regarding the preparation and completion of the audit is "settled, either by agreement, litigation or otherwise."

The court ruled the township has never entered into a contract with a private accounting firm to perform the audit and as the record currently stands the court ruled, "the auditors are obligated to perform the task."

Russell added that the parties are "urged" to attempt to resolve the dispute for the betterment of the township.

Problems developed between the auditors and the supervisors while the auditors were preparing to perform the 2008 audit of the township records and accounts. There was disagreement over the records that the township needed to provide to the auditors. The auditors believed the township needed to keep or prepare records, which the supervisors disputed.

There was also disagreement over whether or not the township, or an official such as a secretary/treasurer, was obligated to engage in various record keeping duties. Because of the stalemate, the auditors last March requested the county court to appoint an attorney to represent them and the court named Domalakes.

Russell noted the 2008 audit had not been completed by the required statutory time. The auditors maintain they were being frustrated by the supervisors while the supervisors claimed that the demands of the auditors to produce or prepare certain financial and other records was unappropriated. The supervisors claimed they informed the court they were hiring an outside accounting firm to complete the audit because the auditors' "apparent inability to work together and come to an understanding as to the township's obligations and the powers of the auditors in making their various demands, the township has decided to obtain the services of an independent accountant to audit the 2008 fiscal books."

Russell concluded, "The supervisors and auditors remain at odds as to whether the latter are still required to perform the 2008 audit. The reliable evidence indicates that the outside firm was never actually retained to perform the audit. The auditors - per statutory law - are not to 'audit,' settle or adjust the accounts audited by the appointee.

"Herein no accounts have been audited by any appointee. Nevertheless, it is found that the auditors had ample reason for extensive delay because the township had acted to replace them. Moreover, any reason for extensive delay in the township's producing the records for the auditors has never been provided, and, obviously, prevented the auditors from performing their duties.

"However, as the township, apparently, never signed a contract with the accounting firm to perform the audit, it would appear that the auditors are obligated to do so. Accordingly the parties are urged to attempt to resolve the dispute for the betterment of the township."

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