Cash delivery followed DuBois, PA official’s arrest· Spotlight PA State College

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DUBOIS — On an otherwise routine Tuesday in early May, DuBois’ solicitor showed up at City Hall with $93,920 in cash tucked inside a cardboard box and packaged in a gift bag.

The solicitor, Toni Cherry, pulled DuBois’ Interim City Manager Chris Nasuti and Police Chief Blaine Clark out of a meeting. According to Nasuti, she handed the gift bag to the two men and told them that the cash — in bills of $20s, $50s, and $100s — belonged to the city. She advised them to deposit the money and did not explain why or how it came into her possession.

"Of course, it was a surprise," Nasuti told Spotlight PA. He said he and Clark immediately put the cash into a new bank account isolated from other city funds, and alerted the state attorney general's office.

The mysterious origin and handling of the bag full of cash is now at the center of yet another storm in a community already reeling from a distressing corruption scandal.

Earlier this year, one of DuBois’ most politically connected government officials, former City Manager Herm Suplizio, was arrested.

Suplizio is accused by the state attorney general's office of stealing more than $600,000 in taxpayer money over nearly a decade, charges that raise troubling questions about how such a large-scale theft could play out in a city of about 7,400 without anyone noticing.

Attorneys for Suplizio have declined requests for comment from Spotlight PA, and he has yet to enter a plea in the case or appear in court.

The sudden appearance of almost $100,000 in cash has only intensified the feeling of unease in DuBois — a small city about two hours northeast of Pittsburgh — and sows doubts about the efficacy of accountability mechanisms in place for local governments in Pennsylvania.

DuBois residents learned about the cash at a City Council meeting on May 8, when Nasuti was asked about it by a resident in attendance.

"I don't know where the money originated," Nasuti said. "It was brought here. Chief Clark and I took it to the bank. We secured it, opened a new account. [The] money is secured there. The attorney general knows we have the money. So that's where it is."

Cherry declined to comment when reached by Spotlight PA.

Interviews with Nasuti, a now former city council member, and several DuBois residents, as well as a local nonprofit's statement, have revealed some additional details. But it is clear that most city officials, gobsmacked by the money's discovery, can't answer fundamental questions about it.

Nasuti said Cherry told him only that the money belonged to the city's "Community Fund," referring to bank accounts associated with DuBois’ annual summer celebration called Community Days. She didn't divulge how or when she got it, from whom, or from where.

City officials learned from other sources that the cash had been stored at an area nonprofit: the DuBois Area United Way, where Suplizio, until recently, served as executive director.

Shannon Gabriel, who until late last week was a DuBois City Council member, was told that cash lockboxes were also discovered hidden in the United Way's ceilings. The charity confirmed, in a statement, that it found lockboxes in its building. Both the charity and city officials say they do not know who placed the boxes there, or why. They also say they do not know if any of the $93,920 was in those lockboxes, or whether the cash was stored somewhere else at the nonprofit.

One thing is certain, Gabriel told Spotlight PA: "It's absolutely not normal."

In the days after the city acknowledged the cash at the public City Council meeting, the DuBois Area United Way released a statement providing a painstaking timeline of when it learned that cash had been stored in its building, and the steps it took afterward.

But the statement raised as many questions as it tried to answer.

In it, United Way officials said they "became aware" on March 22, two days after Suplizio's arrest, that cash had been removed from the group's building near downtown DuBois.

Officials said the cash was not United Way money, and that they didn't know how or why it came to be stored in their building.

Cherry, according to the statement, also knew about the cash in late March — a full six weeks before she dropped it at City Hall.

United Way officials said Cherry left a voicemail with the nonprofit's lawyer on March 28 in which she said the cash was from the "Community Fund," and that she had instructed it be removed from the building and brought to her.

The statement did not say who Cherry gave the removal order to or when. United Way officials and an attorney representing the nonprofit did not respond to requests for comment.

The "Community Fund" refers to bank accounts associated with the Community Days celebration. The weekend extravaganza, which celebrates the town's history — particularly its volunteer fire department — is underwritten by city dollars and private donations.

In the corruption case against Suplizio, law enforcement officials alleged he siphoned tens of thousands of dollars from those accounts, diverted them into personal bank accounts, and used them to pay his credit card bills and make political contributions. The charges against Suplizio alleged he would write checks from those accounts, and then cash them, using some of the money for festival expenses and diverting a portion of it to himself.

Those accounts were not part of the city's computerized financial system prior to Suplizio's arrest, making it difficult to trace money flowing in and out of them.

Gabriel resigned from the City Council last week, saying it was in the best interests of her personal safety and overall well-being. She previously said she was frustrated by Cherry's silence on the money. The City of DuBois, she said, generally does not deal with large amounts of cash, normally receiving payments by check or electronic means.

The solicitor, she said, has left city officials in the dark, even though her job requires her to advise them.

"It's mind-boggling," Gabriel said.

Cherry has refuted the corruption allegations against Suplizio, and told city residents at public meetings that there is "no money missing." She told the Courier Express that investigators ignored information provided to them that would contradict the charges.

The attorney general's office is "not interested in truth. They’re not interested in common sense. They’re interested in grandstanding," Cherry told the publication in April.

Gabriel, who has spoken critically about the issues in city oversight brought to light by Suplizio's arrest, said Cherry left a voice message with one of her relatives in which she complained about Gabriel's candor on social media.

"I’ve asked you to keep Shannon off Facebook, and you don't do it," Cherry told Gabriel's relative in the voicemail, which was shared with Spotlight PA. "I don't think the little girl understands she's her own worst enemy."

At the May 8 City Council meeting, Gabriel made a motion to terminate Cherry's employment, but the effort was not seconded by any of her colleagues and failed.

Like other municipal governments in Pennsylvania, DuBois has adopted a system that in theory has built-in mechanisms for tracking funds coming in and going out of local coffers.

The city has a treasurer whose primary responsibility is to ensure its municipal accounts are balanced at the end of each day, according to court records in Suplizio's case. The treasurer also collects all money paid to the city, and makes sure those funds are placed in the correct bank accounts. A deputy creates a monthly report that details money flowing in and out of city accounts and is submitted to the City Council. The city's controller and finance manager also help ensure taxpayer dollars are correctly accounted for.

There are also annual audits. Pennsylvania requires municipalities file yearly reports to disclose their revenues, expenditures, and cash balances, including petty cash, among other financial information. Separately, municipalities can, and often do, hire private firms to conduct even more detailed annual audits.

State records show the City of DuBois has regularly filed those reports to the Pennsylvania Department of Community and Economic Development (municipalities that fail to do so are not eligible for coveted and frequently used state grant funding). DuBois also hired a third-party accounting firm to perform additional annual audits, documents Spotlight PA accessed through a public records request.

In one of those reports, released in 2020, auditors found that the city had in the previous year erroneously deposited "a significant amount of donations" made for a city ball field into the DuBois Area United Way's account. The mistake was "not detected by the City's internal controls," according to the audit.

The audit noted that the city immediately corrected the error upon notice, but did not say how much money had been misplaced. Spotlight PA asked the city to provide that information but has not received a response.

Additionally, at least 10 city audits for the past 12 years found DuBois’ internal controls over financial reporting to be a "material weakness." The city's financial personnel, the audits said, "do not currently possess an appropriate level of technical knowledge and experience of generally accepted accounting principles."

The City of DuBois uses what's called a cash basis of accounting, under which "it's technically not city money until you deposit it into your account," said Greg Primm, president of the Association for Pennsylvania Municipal Management, which advocates for ethical and professional management in local governments.

The cash basis accounting method is less favored because it may not reflect actual balances at any given moment.

"Your auditors aren't there to find problems. … It's not their job to go digging and doing forensic audits, to make sure that things aren't being done illegally. They make observations, they make findings," Primm said. "The power comes from the council people elected to look at that audit report, understand that audit report, and take positive steps to implement recommendations and findings."

Carol E. Roland, a partner and certified public accountant with Trout CPA in Lancaster, echoed that sentiment. That the city did not take corrective action after its audits highlighted potential problems signals "a breakdown with the city government," she said.

"That is a city internal control problem," said Roland, whose practice areas now include fraud investigations and fraud risk management. "The internal control is the responsibility of the city's management team."

Strong internal controls become even more important because there is no state entity that oversees how local governments are run, Primm said.

It is why, he told Spotlight PA, his association "preaches the gospel to have good professional management."

In the recent primary election, city residents registered their apparent dissatisfaction with the way DuBois’ government has been run.

Though the outcome may not be certified until next month, unofficial results show three incumbent members of City Council, including the mayor, were trailing significantly in votes behind challengers.

In the lead: write-in candidates running on a promise to "restore integrity and trust."

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