The city is reviewing internal controls and considering future safeguards to put in place
TRENTON -- Trenton Mayor Eric Jackson said Monday that the city's outside labor counsel is reviewing its internal controls and any steps that can be taken to ensure there is no repeat of its payroll fiasco.
The city's former payroll company, Innovative Payroll Services, is under federal investigation amid allegations that its former CEO John Scholtz embezzled millions of money from the city and others that was owed for federal and state payroll taxes.
The city filed a lawsuit and three judicial orders have since been issued to protect the assets.
"Not only are we taking an internal audit, but we're having an outside legal firm look at the processes that not only took place during that period, but the organization that's set up so we can avoid having similar things," Jackson said during a media roundtable.
He said the firm is taking a detailed look at how it occurred and what safeguards can be put in place to protect the city in the future.
City records showed that over the course of last year, the city received more than a dozen notices from the state and Internal Revenue Service over unpaid balances, interest and penalties.
Email exchanges showed that Mary Henry, one of the city's principal accountants, forwarded the notices to IPS, who often replied that they would look into it and get back to the city.
"The city was victimized and we want to make sure that we can put in as many safeguards in place that will prompt us to see these type of things coming as best we can to help ward them off," Jackson said.
Acting Prosecutor Angelo Onofri, who was also present, said the city "acted very quickly." The city first realized there was a problem in late December, according to its lawsuit, and Onofri said the prosecutor's office was called in January.
"As soon as that first notice came, (Business Administrator Terry) McEwen and (Law Director Marc) McKithen called us and we convened a group together," he said.
The case, meanwhile, continues in the courts.
"The hope is that the judicial system does what it does and gets 100 percent of our money back," the mayor said. "Is that going to happen? I don't know ... but we'll figure it out as we go through this system. I would like to have all of our money back. That's what we're fighting diligently for."
He said that depending on how the litigation turns out, next year's budget could be impacted.
"They'll take that into consideration as we build toward next year's budget depending on where we are in litigation to figure out where we have to balance that out at," he said.
Cristina Rojas may be reached at crojas@njadvancemedia.com. Follow her on Twitter @CristinaRojasTT. Find The Times of Trenton on Facebook.