State Auditor Says City's Balance Unknown

CLEVELAND (AP) - State Auditor Jim Petro says the city's bookkeeping is so bad that it will take until April to determine its bank balance.

"We can't find it," said Petro, whose auditors have been studying Cleveland's books since 2000. "Nobody knows how much money they have."

Mayor Jane Campbell must have a billion-dollar budget for 2002 submitted to City Council by Feb. 1 without knowing how much she has to spend.

Petro said Wednesday he hopes the city can determine its bank balance by April 1, the deadline for council to pass a budget. He said Cleveland is the only major city in Ohio that doesn't know its bank balance as of Dec. 31.

In his final news conference Jan. 3, former Mayor Michael R. White announced he was leaving an $11.8 million surplus and that the city was on "solid financial footing."

Two months earlier, White projected the city would start the new year with only a $29,333 carryover. He made the projection in the annual certificate of resources that the Cuyahoga County Budget Commission had to approve before the city could spend money in 2002.

White, who was reported earlier in the week to be on vacation in Hawaii, could not be reached to comment on Petro's statements. A message seeking comment was left Thursday at his home.

Campbell said earlier this week that her financial experts were unable to find the $11.8 million surplus.

Petro also released two special audits Wednesday that show the city misspent hundreds of thousands of dollars in state grants.

Petro's auditors found that Cleveland spent $720,000 in state money designated for air pollution control for other purposes. An Ohio Environmental Protection Agency spokeswoman said the agency will negotiate with the city for a reimbursement.

Cleveland already has paid the federal government more than $600,000 that the city misspent in the same air pollution program.

The second audit involved the Jobs Training Partnership Act and the Empowerment Zone, two programs that have given the city millions of dollars in federal grants. Cleveland was supposed to use the money to offer job training to low-income residents and renovate a career center.

The audit found that the city and its contractors could not account for hundreds of thousands of dollars. It also found the city failed to seek federal reimbursement for $1.7 million spent in the programs, meaning Cleveland taxpayers paid the cost.

(Copyright 2002 by The Associated Press. All Rights Reserved.)