An investigation into missing funds at the Township of East Hawkesbury ended on Friday morning (November 27) when former Township of East Hawkesbury Clerk-Treasurer Linda Rozon pleaded guilty to two counts of fraud and breach of trust in an Ontario Court of Justice. But the story is not quite over yet. Sentencing will take place at a later date and a prison sentence is possible.
By pleading guilty, the case involving the former municipal administrator will not go to trial.
The Review reported in August 2017 that Rozon, who had been employed by the Township of East Hawkesbury for 38 years, had suddenly left her position in June that year after Deloitte auditors found $53,000 missing during a routine audit. Rozon paid back the missing funds and the municipality did not press charges at that time. The repayment consisted of accumulated sick time and vacation time owed to Rozon, but she paid an amount over and above what was owing to her at that time to make up the full repayment.
But an audit into the past continued, and in the end, it was discovered that various transactions were traced totaling $307,094 in funds diverted from the Township of East Hawkesbury. These transactions and unauthorized deposits were alleged to be connected to the former clerk-treasurer and are thought to have taken place between January 1, 2008 and December 31, 2017.
Irregularities first surfaced in 2016 when the municipality’s auditor noticed payments made by the then-clerk-treasurer to herself. This discovery led to a further audit of financial statements, initially reviewing just the previous two years. Council was informed in mid-2018 of irregularities and unusual transactions which had not been approved by council.
To date, the Township of East Hawkesbury has paid about $250,000 in extra audit fees; the company responsible for auditing the municipality’s finances on an annual basis conducted the audit.
The Township of East Hawkesbury filed a claim with its insurer, which has paid the municipality $504,409.
The incident has left East Hawkesbury Mayor Robert Kirby disappointed and upset. He says that he has not spoken to Rozon since the incident first arose and that the township has not received an apology.
“It’s very disappointing,” Kirby reiterated. “As mayor – and councillors, too, we have to take an oath of office. It’s a matter of trust,” Kirby said. Kirby pointed out that municipal staff in positions of authority are not required to take any kind of oath of office.
Likewise, East Hawkesbury CAO/Clerk-Treasurer Luc Lalonde says that this incident greatly affects public trust, acknowledging that it is most difficult for the elected officials. “They are the ones who have to talk to the public,” he said. Lalonde says that additional accounting measures and new software have been put in place to make sure nothing like this ever happens again.
In 2020, the Township of East Hawkesbury’s projected budget totalled $5,137,855, while in 2019, the township’s total budget figure was 3,997,272. The 2020 budget is significantly higher due to a grant for a construction project in the township.