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Riverside Bank cops plea on Kay Clem’s bank account
BY LISA ZAHNER - STAFF WRITER (Week of January 28, 2010)

An independent auditor recently discovered that almost $4,000 from a Supervisor of Elections’ account was transferred into Supervisor Kay Clem’s personal bank account.

It took four months for someone to catch the error, which has been explained by Riverside Bank – which handled both accounts — as a “bank error” that “in no way was requested by Mrs. Clem.”

According to top county officials, auditors Harris Cotherman & Associates, P.A., who are currently reviewing the county’s books for the 2008- 2009 fiscal year, reported to County Administrator Joe Baird that $3,950 went missing from the Supervisor of Elections’ coffers and ended up in the personal bank account of the department’s top offi cer, Kay Clem.

The funds were transferred to her accounts in four different transactions in December 2008, January and February 2009. After the error was discovered, the funds were returned in March 2009.

What happened is complicated, to say the least.

What is surprising is that no one appears to have been balancing the checkbook at Clem’s office. Clem admitted that her bookkeeper “was behind and was not reconciling the accounts in a timely manner.”

Clem and her attorney-husband, Chester Clem, both have accounts at Riverside Bank, which at the time employed our newly hired County Attorney Alan Polackwich, who incidentally is Chester Clem’s former law partner.

The Supervisor of Elections Office has 10 accounts at Riverside, including one opened for the purpose of segregating federal funds which subsidize elections activities.

Clem’s bookkeeper requested that Riverside give her online banking access to this Federal Elections Activities account. The bank gave the bookkeeper access to an account with a balance of just more than $16,000, but it turned out to be Clem’s line of credit account with the bank, not the county account for the federal funds. The line of credit was switched over to the Supervisor of Elections batch of accounts and mislabeled.

Conversely, Clem said the Federal Elections Activities account was linked to her personal batch of accounts, though she never sought to access those funds.

“The balances were about the same so I didn’t notice,” Clem said. “I do all my banking online, so I never looked at the paper statements to see that anything was wrong.”

Commissioner Bob Solari said he was very concerned when he found out about this and questioned Clem, whom he said offered no suitable explanation. Clem was instructed to find out what happened, how it happened and to report back to the top brass at the county.

Solari said it was worrisome that the accounting controls at the Supervisor of Elections office did not catch such a mistake.

“Those were my concerns exactly,” Solari said.

Clem said after 13 years of clean audits, she was incensed at the bank for making such a mistake. When asked what her instructions were to Riverside’s Assistant Vice President Michele Knight, Clem responded, “I don’t think I want in print exactly what I said.”

Clem said the account discrepancy was revealed to auditors on the telephone, but that the team of CPAs has not yet made its way to the Supervisor of Elections to examine the documents in person. Clem said she is unaware of any requirement to report the comingling of her personal funds with federal funds and that she has, so far, not relayed the details of the incident to anyone outside the county government.

“I will take the auditors’ lead on that,” she said.

Measures have been taken to ensure that a similar mistake doesn’t occur going forward and the bookkeeper, who has since resigned from the county, has been replaced.

The complete audit report is expected to be bound and released in early March.