News Summary

HAMILTON — HAMILTON — Financial gifts bequeathed in the wills of two local residents to the Lane Public Library were not invested properly, according to the state auditor's office.

The state released its findings Thursday, Jan. 8, from a routine audit of the library's financial records from 2005 and 2006, which indicates approximately $600,000 invested in two funds — the United Services Automobile Association and the Latta Mutual Fund — does not comply with Ohio law because public entities cannot become shareholders "in any joint stock company, corporation or association," said Steve Faulkner, deputy press secretary for Ohio Auditor Mary Taylor.

The library will have to sell the stock holdings and reinvest in certificates of deposits, U.S. Treasury bills or some other investment tool that's allowed under Ohio law, said Mary Pat Essman, Lane Public Library clerk and treasurer.

"We've had these funds since the 1990s, and we've been audited all this time," Essman said.

The funds were the result of generous gifts by two local residents who included the library in their wills, Essman said. The Latta fund was started in 1999, with an initial amount of $403,630; the USAA fund was started in 1987 with yearly deposits of $5,000, but the fund wasn't gifted to the library until the mid-1990s, Essman said.

The issue looks like an innocent violation, Faulkner said, but auditors will review these findings during in the next two-year audit to ensure compliance.

Lane Public Library, which has three branches in Hamilton, Fairfield and Oxford, and two bookmobiles, received $6 million in state funding; collected $219,460 in fines and fees; and earned about $122,000 in investments in December 2006, the end of the audit period, according to the report.