After seven months of waiting, the city of Fort Thomas has shared a draft version of a comprehensive audit of the city’s finances. While the forensic audit confirmed no fraud, it revealed more than $500,000 more money unaccounted for than officials initially knew of. That brings the total discrepancy to $847,335.
“You guys say ‘trust me’ — we do want to trust you, but we’re seeing things where things are not being followed,” resident Tiffany Hubert told council members at Monday’s meeting. “The process isn’t being followed, the law isn’t being followed.”
Last August, a separate firm initially recommended the city write off $322,498 to balance its accounts. Firm Dean Dorton was tasked with determining if that amount was accurate. Instead, it found unrecorded funds from opioid settlements and the American Rescue Plan Act, as well as missed and misrecorded payments. This pushed the total amount of money unaccounted for even higher.
In addition to the city’s failure to record years of income from opioid settlements and ARPA funds, officials also failed to record payments being made for payroll purposes. In simple terms, the amount of money in the bank never matched the amount of money Fort Thomas officials believed there to be.
While Dean Dorton has been able to explain some of the misrecorded money, it still has not found an explanation for $847,335.
But this amount could still change. Public pressure forced city officials to publish a draft version of the audit, so the final version may differ slightly. Even so, city officials are looking for a date in October for a public discussion with the accounting firm to answer questions from residents.
“Is there any plan moving forward to make sure that there is some oversight?” resident Ally Alessandro asked on Monday. “Are we going to be hiring someone [for] that position out, and by that position I mean the Chief Financial Officer?”
The root cause
The report found the root cause of some of the missing money came from basic accounting errors:
- Monthly ledgers dating back to Fiscal Year 2017 do not align.
- Some transactions were not recorded in the system.
- Multiple investments, bank statements and certified deposit accounts were unorganized in one General Fund ledger account.
- Payroll entries during this time were 77 days late on average.
- City staff’s gross payroll entries failed to record transfers to employee health insurance fund, FSA contributions, processing fees and deferred compensation contributions.
This does not include the $847,335 still unaccounted for. Dean Dorton still found no unauthorized payments, confirming city officials’ assertions that no one committed fraud. But the poor accounting extends longer than they initially believed: back to at least 2017.
City officials are at a loss on who they can hold liable for the mistakes — especially because Fort Thomas’ previous accounting firm did not have insurance and both partners on the firm have passed away.
“It predates all of us,” city attorney Brandon Voelker said.
Resident Elizabeth Allengreen suggested going after the previous Financial Director Joe Ewald’s insurance. Voelker said since there was no fraud, it’s not likely the insurance would cover the poor bookkeeping. Ewald declined to comment when reached earlier Monday.
Multiple issues with payroll
The forensic audit found years of misrecorded payments and fees in employees’ payrolls. Not only were payroll entries 77 days late on average, the audit also found failed or incorrect entries of the employee health insurance fund, FSA contributions, processing fees and deferred compensation contributions.
Dean Dorton found missed payments or misrecorded payments to total $585,256 — which means the city overestimated how much it contributed to the different funds.
Based on this report, employees should not have seen effects on their pension and 401k accounts, because the city was still making fees and payments to payroll and health insurance companies.
The books simply don’t reflect those totals, and the audit found shortcuts were taken in payroll processing, but it didn’t name the responsible party.
“However, as a result of this apparent shortcut, the City's liabilities were not accurately reflected on its balance sheet and transactions were missed or mis-recorded,” Dean Dorton reported.
That’s similar to what former Fort Thomas police officer Adam Noe told the council at a meeting back in July.
“Long story short, basically what had happened was during those seven years the city had been not calculating our pension contributions correctly,” Noe told council. “They were being basically taxed when they should have been pre-taxed and those were reported on our W2s as taxable income.”
At the time, Voelker said the city was by no means liable for the error.
“I don't think it's appropriate to handle a legal matter in a public meeting,” Voelker told Noe.
City council members told Noe they would establish constant communication with him. However, Noe spoke again at Monday’s meeting.
“You know how many emails I’ve received since my last time here?” Noe said. “One.”
Recommended action
A large part of the reason for the forensic audit was for city officials to receive a professional opinion on how to structure the finance department moving forth.
Dean Dorton suggested four action items in the report:
- Create separate cash accounts for each bank, investment and certificate deposit accounts.
- Reconcile every month: prepare action items, reviews and a closing date at the end of the month.
- Record payroll completely and on-time every month.
- Strengthen journal entry oversight by reporting reconciliation amounts to city leaders and require transaction-level support.
The city already keeps monthly ledgers through the Finance Committee page dating to July 2025 — an early effort to mend trust in leadership.
Fort Thomas Mayor Andy Ellison said the city will post a Chief Financial Officer position soon — a change from previous attempts to outsource the job to a private firm. For now, the city will maintain a contract with the private firm for quarterly audits, until it is satisfied with the new finance director.
“It was the perfect time to try something different and have a private firm come in here that was completely independent of the building to get into the finances and look,” Ellison said. “Now we will have a finance director.”
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