State Investigating Kennard Clerk-Treasurer

Published October 7, 2015
By Jeff Eakins, for The Banner

The Indiana State Board of Accounts and Indiana State Police are conducting a joint investigation into the theft of possibly as much as $40,000 in public funds by the town of Kennard's clerk-treasurer.

Last week, the SBOA received a tip that Kennard's clerk-treasurer, Karen Stanley, may have been intentionally overpaying herself for more than two years. Investigators made the trip from Indianapolis to Kennard Monday morning to interview Stanley, and, based on that interview - which took place at Stanley's home when she didn't show up for work at Kennard Town Hall - the SBOA has begun an audit of the town's finances.

The pending investigation prevents the SBOA from releasing details from investigators' interview with Stanley. However, the fact that the agency is now undertaking an audit while continuing a joint investigation with the ISP suggests Stanley likely told them the same thing she told The Banner - that she was paying herself well more than the clerk-treasurer's annual salary of $16,500.

According to the town of Kennard's most recent Form 100R, a report listing yearly earnings for town employees and officials that is required to be filed with the state each January, Stanley was paid $30,125 in 2014. The town's 100R from the year prior to that shows that she was paid $34,375.

When The Banner asked Stanley last Thursday about the discrepancy between the amounts on the 100R's and her $16,500 salary, she admitted that she had been overpaying herself. She said she had basically been paying herself every two weeks what she should have been paid for the entire month and that the amounts on the 100R's, which show overpayment of $31,500 during 2013 and 2014, are correct.

"I cannot believe I did it," Stanley told The Banner. "I'm ashamed (and) embarrassed. … and I can't believe I did it two years in a row. … I got carried away with it, and I should have stopped."

In her interview with The Banner, which took place at Kennard Town Hall just minutes before last Thursday's monthly meeting of the Kennard Town Council, Stanley said she had started making advance payments to herself because she was short on money. She said her husband had had a stroke and that she was having car issues.

"Just things like that," Stanley said. "In general, spending too much money and needing to pay something."

According to Stanley, her practice of overpaying herself continued into 2015 and she estimated she had overpaid herself about $6,000 this year. However, if she was overpaying herself in the same manner as she had in 2013 and 2014, this year's overpayments could actually be more than $10,000.

Stanley, who was appointed clerk-treasurer in 2012 after her predecessor, Kylie Doubman, resigned, told The Banner she had kept track of her overpayments and has started paying back what she owes the town. While she said she "can't pay it back all at once," if still in office in January, when her new four-year term is scheduled to start, she said her intention would be to turn over any pay she earns to the town.

"There's no reason I should not be able to pay it that way," Stanley said. "My husband makes decent money."

The Banner asked Stanley if she recognized her actions were a violation of the public's trust.

"I do," she answered. "That's one of my biggest things. I don't want people to think I'm not trustworthy, because I am. I love doing what I do, I like my job and I'm trying to help people as much as I can with the town."

While she said she knew what she did was wrong, Stanley pointed to the fact that she didn't try to hide the overpayments on the the 100R's for 2013 and 2014 and that they had accurately reflected what she had paid herself those two years. She also said that when a former town council member, John Ryan, had recently contacted her to ask her about the amounts on the 100R's, that she had admitted to him what she had done.

"I was honest," Stanley said. "I said I overpaid myself. I said I'm working on trying to get it paid back."

When she spoke to The Banner last week, Stanley said she had not yet talked to any of the current members of the Kennard Town Council about the overpayments.

Saying she didn't "want to talk to them about it front of everybody," she said she did not plan to bring the matter up during that night's council meeting, and she didn't.

The Banner attempted to contact the three town council members to get comment from them on this matter, leaving phone messages for them and e-mailing two of them whose e-mail addresses were listed on the town's website.

Council President Jason Groce did not return The Banner's phone calls, but did finally send back a short e-mail asking The Banner to e-mail him the newspaper's questions. The Banner complied with his request, but, as of the news deadline for this week's issue, Groce's responses to these questions had not been received.

The Banner spoke briefly on the phone Monday with council member Shannon Dickerson, who did not attend last week's council meeting. She referred further questions to David Copenhaver, the town's attorney, then hung up before The Banner could ask her anything else. The Banner called her right back, and when she didn't answer, left a message that was not returned. Dickerson also did not respond to questions that were e-mailed to her.

The council's third member, Carolyn Roberts, did not return The Banner's call by this week's news deadline. Unlike Groce and Dickerson, she did not have an e-mail address listed on the town website.

Copenhaver, the town's attorney, told The Banner on Monday that Ryan, the same former town council member who had confronted Stanley about the overpayments, had also recently called him and alerted him to this potential problem. He said he contacted the SBOA and Henry County Prosecutor's office and told Ryan to contact Groce.

"I just wanted them to come in and do an audit," Copenhaver said of the SBOA. "I was going to tell them exactly what I had been told. And, really, the town council doesn't have any authority to investigate or discipline (the clerk-treasurer), or anything like that, so my goal was just to turn it over to people who did have that authority."

Copenhaver said he was glad the SBOA was undertaking an audit, but that he wasn't exactly sure what will happen now. Until she resigns, or is convicted of a crime that results in her losing her office, he said Stanley remains the town's clerk-treasurer. He said the town may need to look into appointing a deputy clerk-treasurer to do the job while Stanley is being investigated.

"The town will look into whatever it needs to do so that it can keep operating the business of the town properly while this investigation is going on," Copenhaver said.

Andy Shank, the SBOA's director of special investigations, told The Banner on Monday that he doesn't expect that his agency's audit will take very long to complete. Once finished, he said the audit report will be forwarded to the ISP, which will send the results of its investigation to Henry County Prosecutor Joe Bergacs, whose office, he said, has already been notified of the investigation.

"We are also taking the steps to notify the town council just because we don't want her to have access to that checkbook anymore to potentially cause more damage," Shank said. "…The SBOA will conduct a full audit of the town of Kennard's finances to ensure that no other funds were misappropriated and that all funds of the town have been properly accounted."

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