Small town clerk questions state late fees

Ron Koehler, the clerk treasurer in the town of Dayton, was ordered to pay back $1,900 after the last State Board of Account's audit.
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A small town administrator is socked with penalties for paying late, while state leaders don't have to follow the same rules.

13 Investigates has uncovered millions of dollars the state pays in late fees with no consequences. But in the town of Dayton in Tippecanoe County, an official was penalized for his overdue bills that were substantially less.

Good government in Dayton means paying bills on time. The cost of paying late hit Clerk-Treasurer Ron Koehler right in his own pocket.

"Something needs to be done," said Koehler, who was forced to personally pay back nearly $2,000 in late fees after a 2010 audit.

It's state policy to protect taxpayers. Koehler agreed to speak with us about it, but didn't want his face on camera for the actual interview.

"We had an assistant clerk in here that was paying the bills and didn't pay them on time, so me being the town clerk, I got charged for it," explained Koehler.

State Board of Accounts Examiner Bruce Hartman declined an on-camera interview, but said:

"We give a warning the first time that late payments and interest are not efficient use of taxpayer dollars. We try to help local and state government to understand it's not appropriate. If it does continue to happen, when we return for a follow-up audit, the policy does allow us to order the government official to personally pay for the late fees and interest."

"We believe in accountability," insisted Governor Mitch Daniels as he took questions about Indiana's recent discoveries of recent accounting errors.

But accountability for who?

In Koehler's case, the examiners said, "There were many instances of late payments to vendors" totaling $1,900 and "requested that Ronald Koehler reimburse the town."

He did, even though he had not received one dime in salary for seven straight years on the job.

Yet 13 Investigates found state agency after state agency racking up 100 times as much in late fees. Some of the agencies were paying anywhere from $100,000 to more than $500,000 in interest and fees.

The governor called it insignificant and balked when we called it wasteful mismanagement.

"It would be a grossly inaccurate and a disservice to the best public service in America to characterize or mischaracterize them in that way," Daniels told 13 Investigates.

"They should be penalized the same way, or they should clean up their act. If they're going to come down on all the small town clerks," Koehler said. "Yes, it does seem unfair."

13 Investigates Reporter Sandra Chapman caught up with the governor following an event after his office refused for weeks to respond to the late payment fees.

"We found that state agencies are late paying their bills to the tune of millions of dollars," questioned Chapman.

"That's not mismanagement. What mismanagement is, is paying too early," snapped the governor.

The State Board of Accounts denies a double standard.

"I don't believe there (are) inconsistencies," Hartman said. "Our policy for everyone is to warn them the first time and charge during the next audit. State agencies haven't had the follow up audits completed yet. They will be treated the same once those audits are completed."

Daniels is in New York Monday night, receiving an award from the Manhattan Institute for Fiscal Responsibility.

Read the original story, and why the practice of paying bills late has an adverse effect on non-profits and the Hoosiers who rely on their services.