A recently released audit of Hilliard's finances dating back to 1996 has revealed "negative anomalies" in the millions of dollars over the past two decades, according to city officials.

It was the second audit related to former Hilliard Recreation and Parks Department deputy director Heather H. Ernst, who pleaded guilty in October 2018 to one count of theft in office and one count of attempted tampering with records.

She had been accused by Hilliard investigators of stealing more than $500,000 in daily admission fees from the city's two pool facilities from May 2013 to fall 2017, but court proceedings proved only $271,898 had been stolen for "lifestyle spending," as Jeff Blake, an assistant prosecutor for the Franklin County Prosecutor's Office, said during an Oct. 3, 2018, hearing.

The forensic audit, the results of which were released Oct. 28, was the second performed by the Schneider Downs firm, said David Ball, director of communications for Hilliard. It provided a closer look at the amount of money believed stolen by Ernst; an initial audit was focused on business and accounting practices and provided recommendations for improving financial controls, he said.

Both audits revealed shortfalls in the city's financial practices during Ernst's employment.

"The report gives us a cross-sectional view of the financial accounting practices that failed to detect a significant theft," Hilliard City Council President Kelly McGivern said. "The audit will provide our incoming city manager a road map to develop and implement a more robust oversight process of revenue collection and payment of verified expenses."

Michelle Crandall, who will become Hilliard's first city manager in January as the city transitions away from a strong-mayor form of government, said she has reviewed the audit and will take a long look at the city's practices.

"Once I begin in January, I plan to take a closer look at the changes that have been implemented to ensure we are doing all we can to protect the city from any future acts of fraud," Crandall said.

Hilliard hired Schneider Downs "as part of City Council's commitment to fulfill three promises: (to) determine what happened, hold those responsible for the theft accountable and take all necessary steps to safeguard against such theft of public funds in the future," McGivern said.

Schneider Downs performed a "deep dive" into the financial accounts and activities of the recreation and parks department "intended to help answer the question of the potential extent of the theft and (to) identify potential gaps in financial controls that need to be addressed to prevent theft in the future," she said.

The costs of the forensic audit and an initial audit by Schneider Downs were $228,157, Ball said.

Ernst, who was sentenced in November 2018 to 12 months in prison, was ordered to pay restitution of $271,898 for the money stolen, but city officials believe she might have stolen more than that.

In March 2018, Hilliard filed a civil lawsuit against Ernst – amended in September to include Ernst's husband, Moses, as a co-defendant – alleging that during the course of Ernst's employment with the city, the "defendants retained at least $541,000, depositing at least $270,000 into accounts owned or controlled by the defendants."

The civil lawsuit, still active, seeks restitution for both the amount of money investigators believed had been stolen and the city's attorney fees associated with obtaining it, McGivern said.

The forensic audit revealed "negative anomalies" between $1.2 million and $2.7 million in both gate admissions and concession revenue from 1996 to 2018.

"Gate-admission revenues at the pools did not increase in relationship to the changing population and the significant expansions and added amenities at the pools," the report said. "When using the 1996 and 2018 gate-admission revenues as beginning and end points of the revenue trajectory, the deviation in anticipated revenues is an estimated $2.2 million."

The audit also indicated an increase in purchase orders after Ernst was named recreation and parks deputy director of in 2011.

"The number of purchase orders issued annually under Heather Ernst increased significantly as did the amounts," the report said, increasing from $472,000 in 2011 to $1.52 million in 2017, according to the audit.

"The concern is that once a purchase order is established in the system, invoices associated with an approved purchase order are processed with little scrutiny," the audit said.

"No discernible patterns of concern" were discovered or conclusions reached concerning contractual services, debt services, memberships, programming, supplies or rental-fees associated with the operations of the city's two pools, according to the audit.

The audit identified other areas of concern, including in internal processes in tracking point-of-sale cash records.

Several recommended changes already have been made "via changes to policies (and) practices ranging from cash handling and purchasing to how we track the inventory of fixed assets," according to Ball.

Meanwhile, the city's civil lawsuit continues to add to its expenses for matters related to Ernst.

To date, the city has spent $476,482 on the audits and legal expenses, Ball said, but that amount does not include legal services for which the city has yet to be invoiced.