Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

State v. Neff

Court of Appeals of Indiana

May 11, 2018

State of Indiana, Appellant/Cross-Appellee-Plaintiff,
v.
Beth A. Neff, Appellee/Cross-Appellant-Defendant.

          Appeal from the Delaware Circuit Court The Honorable Marianne L. Vorhees, Judge Trial Court Cause No. 18C01-1707-IF-15

          ATTORNEYS FOR APPELLANT Curtis T. Hill, Jr. Attorney General of Indiana Patricia C. McMath Civil Appeals Section Chief Larry D. Allen Deputy Attorney General Indianapolis, Indiana

          ATTORNEY FOR APPELLEE Jeffrey M. Heinzmann Heinzmann Law Office, LLC Fishers, Indiana

          Mathias, Judge.

         [¶1] On July 12, 2017, the State filed a complaint for removal from office against Yorktown clerk-treasurer Beth A. Neff ("Neff") for neglecting to perform several of her official statutory duties. Neff filed a motion to dismiss the complaint, which the Delaware Circuit Court denied. After a summary evidentiary proceeding, the trial court entered findings of fact and conclusions of law and entered judgment in Neff's favor and against removal from office.

         [¶2] The State appeals the entry of judgment on the merits in favor of Neff. We reverse and remand. Neff also cross-appeals the trial court's decision to deny her motion to dismiss, and on this issue, we affirm.

         Facts and Procedural History

         [¶3] Neff was elected to serve as the clerk-treasurer for the town of Yorktown (the "Town"), Indiana in 2007, and she has served in that capacity ever since. In 2013, the State Board of Accounts ("SBA") performed an examination and audit of Yorktown's 2012 financial records kept by Neff. On December 5, 2013, SBA Field Examiner Mike Wade ("Wade")[1] compiled a report of his findings following the examination. Wade discovered several errors with the Town's records including that: (1) Neff had failed to reconcile Yorktown's accounts for all of 2012; and (2) Yorktown's Park One Wastewater Utility account was overdrawn by $140, 943. As a result, Yorktown's 2012 annual report submitted to the State did not properly reflect the actual financial activity of the Town.

         [¶4] On November 14, 2013, prior to issuing the financial report, Wade and his supervisor Bill Vinson ("Vinson") met with Neff, town council president Robert Ratchford, and town manager Pete Olson to explain the issues. Wade and Vinson discussed the errors with Neff and also directed her to the applicable sections of the Indiana Code and the State Board of Accounts Manual-the Accounting Uniform Compliance Guidelines Manual for Cities and Towns (the "Manual")-in order to rectify the errors and avoid making them again in the future. Vinson and Wade also explained audit adjustments totaling $57, 752.92 that Neff needed to correct to come into compliance with SBA standards.

         [¶5] In 2016, Wade returned to the Town to perform an audit of the financial records kept by Neff from 2013-2015.[2] On November 10, 2016, Wade compiled and filed a report of his findings following the examination. The report states in part:

The Town's accounting records have not been reconciled to depository balances since December 31, 2012. The accounting records contained numerous posting errors, such as transactions not being posted, receipts posted to incorrect funds, and transfer between funds' errors. In addition, as incorrect transactions were discovered, correcting transactions were recorded incorrectly.

Ex. Vol., State's Ex. 2 Financial Statements Examination Report, p. 3. Specific examples of errors that Wade's examination uncovered included: (1) the

         Town's books had still not been properly reconciled; (2) during 2014, two transfers totaling $124, 826 were posted as transfers out without a corresponding transfer in; (3) during 2015, six state distributions to the Town totaling $73, 955 were not receipted to the Town's records; (4) the Town's ledger and annual financial reports for 2013, 2014, and 2015 did not include the financial activity of several Town funds; (5) five of the Town's accounts had overdrawn balances; and (6) there were over twenty accounts affected by incorrect posting errors. See Ex. Vol, State's Ex. 2 Supplemental Compliance Report, p. 4-5; Tr. Vol. 2, pp. 62-68; 124-25. Vinson testified that the examination uncovered so many errors that the SBA was unable to identify all of them. Tr. Vol. 2, p. 120.

         [¶6] On October 13, 2016, prior to issuing the report, Wade and Vinson met with Neff, town council president Richard Lee ("Lee"), and town manager Pete Olson. Wade and Vinson again discussed the errors with Neff and directed her to the applicable sections in both the Indiana Code and the Manual addressing the issues. It was during this meeting that Lee first learned that the Town's books had not been properly reconciled for forty-eight consecutive months. Lee then advised Neff to get outside help in order to fix the problems. Neff suggested hiring the accounting firm Hartman Williams a couple of weeks before the November 2016 town council meeting, and the town council approved the proposal.

         [¶7] Hartman Williams's goal was to come in and rectify the Town's books for 2011-2015 with an initial cost of $20, 000 approved by the Town. Hartman Williams's employee Donna Vinson[3] ("Donna") began working with Neff on the Town's books in November 2016. After Donna began working on the Town's books, the Town council was notified that "the problem was somewhat more substantial and significant than they thought, " Tr. Vol. 2, p. 178, and the cost to remedy the problems increased.

         [¶8] After several months, Donna was able to get the Town's 2011-2015 books reconciled to within $232[4] at a cost to the Town of over $67, 000. As part of her work, Donna had to conduct a bank reconciliation for every month from January 2012 through December 2015 because they had not been performed. Moreover, Donna discovered when reviewing the Town's books that: (1) $16, 190.55 of the $57, 752.92 in adjustments Wade and Vinson provided to Neff in 2013 had not been corrected on the Town's records; (2) over one-hundred and fifty posting errors; (3) thirty-four of the Town's funds required adjustment; and (4) net errors totaling $346, 340.82. See generally Ex. Vol., State's Ex. 10; Tr. Vol. 2, pp. 218-234. Donna's report filed on June 16, 2017, discussed eighteen separate findings of errors with the Town's financial records.[5]

         [¶9] On July 12, 2017, the State filed a complaint for Neff's removal from office based on her alleged negligent failure to perform her statutory duties as the Town's clerk-treasurer. The three-count complaint alleged in relevant part:

Count 1
[. . .] For the last 24 months the Defendant herein has on more than one occasion refused or neglected to perform the official duties of the Clerk-Treasurer of Yorktown in that she has failed to reconcile at least monthly the balance of public funds, as disclosed by the records of the local officers with balance statements provided by the respective depositories, all pursuant to the requirements of Indiana Code §§ 5-8-1-35(2) and 5-13-6-1(e).
Count 2
[. . .] The Defendant herein, being a public officer, i.e. Yorktown Clerk-Treasurer during the last 24 months has failed to follow the direction of the state examiner (Indiana State Board of Accounts) in keeping the accounts of the Yorktown Clerk-Treasurer all pursuant to I.C. § 5-11-1-10, a class B infraction; [. . .]
Count 3
[. . .] The Defendant herein being a public officer, i.e. Yorktown Clerk-Treasurer during the following 24 months, has failed to adopt and use the systems of accounting and reporting adopted by the State Board of Accounts (SBOA) all pursuant to the Accounting and Uniform Compliance Guideline Manual for Cities and Towns (SBOA Manual) as directed by the SBOA, and as such commits a class C infraction which shall result in a forfeiture of office all pursuant to I.C. 5-11-1-21. [ . . .]

Appellant's App. pp. 25-28 (emphasis in original).

         [¶10] On July 17, 2017, Neff filed a motion to dismiss the complaint, which the trial court denied on July 27. On July 28, the trial court held a summary evidentiary proceeding on the complaint. And on August 1, the court issued an order finding that "[t]he State proved beyond a reasonable doubt that Neff failed to reconcile the Town's books for forty-eight consecutive months." Appellant's App. p. 13 (footnote omitted) (emphasis in original). But the court entered a judgment on the merits in favor of Neff and found that removal was not warranted because "Neff is making mistakes and not performing up to the standards expected by the State Board of Accounts for Town Clerks. This is misfeasance and not nonfeasance." Id. at 16. The State now appeals the trial court's decision, and Neff cross-appeals the trial court's decision denying her motion to dismiss.

         Removal from Office

         [¶11] Here, the trial court issued both findings of fact and conclusions of law, and very importantly, the factual findings are not in dispute. We will review the court's conclusions of law de novo. Citizens Action Coalition of Ind. v. Koch, 51 N.E.3d 236, 240 (Ind. 2016).

         [¶12] Article VI Sections 7 and 8 of the Indiana Constitution provide the mechanism and standards by which an officer of the State can be impeached. Section 7 states:

All State officers shall, for crime, incapacity, or negligence, be liable to be removed from office, either ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.