Questions of financial irregularities wash over Allataoona nonprofit

A report released Friday claims that the former general manager of Lake Allatoona’s water protection group received more than $130,000 in salary that he wasn't entitled to.

Ron Papaleoni, the general manager of the Lake Allatoona Preservation Authority, was dismissed on Dec. 30. The quasi-audit prepared for the state-created authority’s board lists a litany of questionable salary payments, purchases and “substantial differences” between expenses and bank statements.

Left undetermined Friday was whether the financial discrepancies between budgets and expenditures were the byproduct of sloppy bookkeeping, as Papaleoni says, or concerted efforts to defraud the Acworth-based nonprofit.

The financial analysis covered only the past 25 months; Papaleoni headed LAPA for 11 years. A criminal investigation apparently is not under way. And the authority has yet to hire a full-time attorney, although the board will meet next week to consider its next steps.

Members of the authority’s executive committee – Chairman Robert Morrison, Vice Chairman Edmund Mullinax and Treasurer Jimmy Durham – declined comment or couldn’t be reached.

Papaleoni said Friday that he is “overwhelmed” by the allegations. He disputed each of the financial charges.

“I am willing to work with whomever to figure out what is going on and handle this in the right manner,” he said. “If LAPA goes away, that would be very, very shortsighted.”

LAPA was created by the General Assembly in 1999 to protect the water quality of Allatoona, one of two major drinking water sources for metro Atlanta. Pricey homes ring its shore; boaters and fishermen fill the lake.

Education, via the Water Resource Center, is a key LAPA role. So, too, is the annual lake cleanup.

Board members come from Cobb, Cherokee and Bartow counties. The fiscal 2010 budget is $125,000, of which the Georgia Department of Natural Resources contributes $75,000 and Cobb County $25,000.

Cobb spokesman Robert Quigley said the county’s leadership hadn’t been apprised of any financial troubles with LAPA.

“We certainly anticipate that the money is spent properly,” he said. “If it’s determined that it has not been, then we’ll take a very close look at the funding.”

In a Jan. 5 letter to LAPA treasurer Durham obtained by the AJC, accountants with Moore & Cubbedge of Marietta wrote of financial statements “inconsistent with expenditures” and records “not in conformity to the approved budgets.”

In fiscal 2009, for example, only 17 of 96 checks written by Papaleoni were documented by invoices. Payment delays were frequent, the accountants said, adding that the general manager also inadequately maintained financial records.

The most damning findings, though, involve salaries. In fiscal 2008, according to the accountants, the board set Papaleoni’s pay at $24,000. Yet he received $96,650 from two different accounts, according to the report.

A year later, he was supposed to be paid $40,000. Yet he received $98,911.

In all, Papaleoni received $131,562 to which he was not entitled, the report says.

Papaleoni, 66, said the excess money did not go into his pocket, but paid the salaries of two other employees and for expenses and “logistics.”

The accountants said documentation, including 1099-S tax statements, wasn’t provided to support Papaleoni’s claim.

Several expenditures were “not in conformity with budgets which were approved by the board,” the letter said.

Papaleoni countered that LAPA’s budget-to-expenditures process has always been loose and without rigorous accounting procedures.

“The bottom line is we did what we needed to get done,” he said.