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Commissioners are denied a peremptory judgment in dispute over audit fee

Published April 30. 2011 09:00AM

A peremptory judgement sought by the Schuylkill County Commissioners against Controller Melinda Kantner was denied and dismissed in a ruling made by Judge Charles M. Miller in the Schuylkill County Court.

The commissioners claimed they entered into a contract with L. Samuel Deegan, CPA, of Pottsville, to perform an audit of the county's financial records. This was done by presentation of a proposal for the performance of the audit which was presented by Deegan and an acceptance of that proposal by Deegan.

In return for his performance of this audit, which was to cover a number of years, he was to be paid a fee of $60,000 per year. The commissioners claimed the controller approved payment to him of most of that fee, but she withheld some portion of it - $4,8000 - which is the dispute.

In their suit, the commissioners claimed that it was improper for the controller to do so since they had approved the full payment of his fee and that she was not empowered to withhold the $4,800 that she continues to refuse to pay.

Kantner's said that in a companion case filed against her by the commissioners that Judge Miller granted the commissioner's motion for peremptory judgement which required her to file a report to DCED (Department of Community Economic Development). She claims that it had been the custom and the procedure that an outside auditor such as Deegan would assist her in the preparation of the annual DCED report. She adds that she was given a deadline by the court to file the report by October 1, 2010 and that Deegan did not assist her. Consequently, in order to meet the deadline, she had to pay a CPA $4,800 which she deducted from Deegan's fee.

The law the commissioners argued is in a section of the county code which they claim prevents Kantner from refusing payment on approval by the commissioners which she did. They claim this is a violation of the code and that she is not authorized by law to disapprove the transaction.

Judge Miller ruled, "If the court was to accept the county's interpretation of this section of the code then the controller's power to review bills would be eliminated altogether, for, once the commissioners approved an invoice or a bill, whether those services were performed or not, the controller would have no power to carry out her statutorily imposed duties of reviewing all bills to see if the claimed bill was valid or not.

"Also the controller argued the court's order directing her to perform a particular audit and then fault her for attempting to meet the deadline for performing that audit by hiring an independent auditor because the one hired by the county would not perform that service.

"Therefore, because there exists in this case, in its present status, a disputed factual issue as to whether the county, in fact, owed this money to Mr. Deegan, the motion for peremptory judgment must be denied and dismissed," Miller concluded.

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