Swansea’s treasurer and auditor seek damages in response to councilmembers lawsuit

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Published: Sep. 21, 2022 at 7:25 AM EDT|Updated: Sep. 21, 2022 at 7:38 AM EDT
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COLUMBIA, S.C. (WIS) - The Town of Swansea’s clerk-treasurer and town-hired auditor have responded to a lawsuit levied by town councilmembers - denying the allegations they’re facing and submitting counterclaims of their own.

Clerk-Treasurer Margaret Harvey and auditor John E. Brown are being sued surrounding Brown’s 2021 audit of Swansea’s finances.

The audit found that records for $3.3 million of town assets were unaccounted for.

Swansea Councilmembers Michael Luongo and Doris Simmons, along with resident Barrett Black, sued Brown, Harvey, Mayor Viola McDaniel and the Town of Swansea for answers on those findings.

MORE: Auditor: Explanation of Swansea’s missing records for $3.3M cancelled and never rescheduled

MORE: Swansea town councilmembers sue their own town, mayor and others over scrutinized audit

MORE: Attorney for subpoenaed Swansea clerk-treasurer says client is “adamant” there was no wrongdoing

The lawsuit asked the court to order Brown to come before the town council to answer questions on the audit and for the Town of Swansea to comply with proper accounting practices (alleging Harvey was not following such practices).

In Brown’s response, his attorney argued Brown made himself available to answer questions in the spring and asked for written questions in August.

Additionally, the response stressed the $3.3 million is not “missing” but rather “understated” as a result of the following:

“... in previous years, the ending fixed asset balance from the previous year was carried forward as the beginning balance of the succeeding year as required by generally accepted accounting principles. This carry-forward was not performed by the Town accountant for the end of fiscal year 2020 and the beginning of fiscal year 2021 which resulted in the understatement.”

In an interview with WIS, Brown compared the situation to balancing the checkbook. He explained the ending balance for one month is the starting balance for the next month.

“That was not done. No information related to fixed assets was loaded into the accounting system,” he said.

Brown declined to state who he worked with in town government to obtain the records.

He reiterated the $3.3 million represents property and town equipment.

His response included counterclaims, including allegations of defamation, abuse of process and malicious prosecution.

Brown asked for the suit to be dismissed and to be awarded damages and attorneys fees.

“I wish they would just leave me alone because what’s happening is I’m being castigated for doing my job. Typically, an auditor would have problems if he goes into an organization and reports that their accounting is in good condition when it’s not and he reports when it is, that’s when he has a problem. In this instance, I went in and told them they had problems, and they went after me for telling them they had problems,” he said.

Harvey’s attorney did not return a request for comment, but her response mirrored Brown’s.

She denied the allegations laid out in the lawsuit and denied she was the town’s bookkeeper. Brown did tell WIS he did not work with Harvey to get the town’s financial records.

Harvey echoed Brown’s arguments about the use of the term “missing” and also alleged defamation and malicious prosecution.

She also requested the case to be dismissed and to be awarded damages and attorney’s fees.

Plaintiff attorney Jake Moore dismissed the counterclaims and stressed the lawsuit is a fact-finding mission not seeking financial damages.

“My clients are not accusing anyone of misappropriating or stealing any money,” he said.

He went on to state:

“Everybody is all up in our arms about ‘oh you sued us.’ Well, yes. But we’re not suing anybody for any money. We simply want the court to order the town to start following generally accepted accounting principles in its book keeping practice,” he said.

Moore said if his clients are provided satisfactory answers in the case’s depositions and the town council agreed to implement improvements in the financial record-keeping, the lawsuit would likely come to an end.

Depositions for Harvey and Brown were originally scheduled for September 30, but Moore said they’ve been postponed due to a scheduling conflict involving another attorney. He said the goal is to reschedule them for either October or November.

Neither McDaniel nor the attorney for the Town of Swansea returned a request for comment on this story.

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