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Forensic audit finds weak controls, concentrated investments and procedural gaps in Manteno finances
Summary
A May 20 special village meeting featured a forensic audit that found weak internal controls, concentrated deposits tied to the Aqua sale, gaps in written procedures and irregularities in procurement records; trustees pledged policy changes and further follow-up.
The village of Manteno heard a forensic-audit presentation on May 20 that flagged weaknesses in cash controls, a concentration of investment funds and gaps in procurement and documentation that trustees said they will address.
Jim Edmondstone, lead auditor, told trustees the team focused heavily on cash and bank activity and that the report will include detailed exhibits and bank-activity summaries. "Our report, we've focused a great deal on cash," he said, outlining reconciliations, wire transfers and account-level analyses. The auditors reported a decline in cash from about $34.6 million in April 2020 to roughly $12.5 million as of April 30, 2025, and said some investment statements remain missing from the files they received.
Why it matters: the auditors said the village placed a large portion of those funds in short-term investments tied to a single bank following the sale of the Aqua utility system. The presentation documented a $25 million deposit related to the Aqua sale that was concentrated at HomeStar Bank (later Midland), which the auditors described as a concentration risk and said lacked clear, documented evaluation in the minutes. The auditors also highlighted several large telephone transfers and wire transactions on bank statements that had limited descriptive information, creating tracing and control concerns.
The report noted that village ordinances require bonding and other protections that the auditors found were not reflected in current practice. Auditors said village coverage included an employee-insurance policy for approximately $500,000 but that the policy may not comply with the ordinance's bonding requirement or extend to trustees; they recommended the board revisit bonding and insurance coverage.
Trustees pressed auditors on next steps and whether the findings would be referred to law enforcement. Edmondstone said forensic auditors can document issues for authorities but do not make arrest decisions. The mayor, summarizing the village's reasons for ordering the audit, said the work answered the board's questions about how much money the village has, where it went and whether it was handled correctly and pledged new protocols for approvals, bids and hiring. "The audit discovered several findings that have answered those three questions," the mayor said.
What happens next: auditors said a final report with exhibits will be delivered in the next few days; trustees said they will update policies on segregation of duties, wire approvals, and investment procedures and will consider the auditors' recommendations about bonding, documentation and transparency.
