On June 19, 2012, the Tax Collector, Denise Cesaroni, informed me that she had a matter in the tax

ofce involving a Tax Release for a Motor Vehicle Account. The Collector stated that a Taxpayer produced a receipt indicating that cash in the amount of $456.29 was paid. The receipt was stamped "Paid June 18, 2012." The stamp was initialed "MS" and contained "Pd by cash." The collector could not locate the cash and the deposit did not include the cash for that particular amount. The system, however, was balanced since the account did not indicated that a payment was made. The collector explained to me that the transaction was "voided" in the computer database. The Collector also advised me that as of that date, only Ms. Kulhawik and herself had the knowledge and authority to void transactions in the system. Based on her initial research, the Collector suspended Ms. Kulhawik and requested my assistance to investigate further. The Mayor directed that I assist the Collector and determine if a complaint would be required to be led with the Police Department. The Collector ran a program report for all of the voided transactions from January 1, 2012 to June 19, 2012. She also ran a report for the same data for the period of January 2011 to June 2011. There were no indications that "voids" were improperly entered. The collector explained to me that it was not uncommon to void a transaction due to an error if a transaction was voided, and the error corrected, the account would be reinstated as an active collection status. The results of the reports indicated a great number of voids from March 26, 2012 to June 19, 2012. The reports did not indicate anything of concern for the period of January 1, 2012 to March 25, 2012. There were no voids in January and February 2012. The Collector also conducted a review of all deposits for the same period. The reporting of payments and the deposits were found to be equal. Therefore, all payments recorded in the system, check or cash, which were not voided, were deposited. The Collector then isolated 78 transactions since March 26, 2012 that were voided and not reinstated, involving 52 taxpayers, and approximately $13,605.72 in tax billings. The Collector then took steps to change passwords and procedures regarding the issuance of a Tax Release Stamp. This action stopped the possibility of any further manipulation in the system. At that time, I informed the collector that I would attempt to contact the 52 taxpayers regarding their account status. I mailed requests to the taxpayers to request them to contact me and to obtain copies of any documents they had regarding proof of payment. The effort resulted in the production of documents from 8 taxpayers. I had conversations with 6 taxpayers, and not one of them could identify who they received the documents from in the Tax Ofce. During the time between June 25, 2012 and July 24, 2012, I was assisted by staff of the City's software provider ('Walsh') in researching what data was deleted or manipulated in the system. Walsh informed me that all transactions were recorded by a user. Each user had their own password for access which no other persons should have knowledge of. Walsh and I went forward with the research with the assumption that the user had knowledge of the entry made.

Walsh then provided me with a report of all of the accounts that were "suspended." The suspension of an account would not allow the system to generate a "delinquent" tax statement which would have been mailed to the taxpayer. The majority of the suspension occured on May 31, 2012. I then determined that the suspension report included 78 transactions involving the 52 taxpayers. Walsh veried that the 78 transactions were suspended under Kulhawik's user ID. The tax collector does not have knowledge of what program was utilized to isolate the data manipulation. During the investigation, the Collector and I gathered copies of the following: 1. Five tax collector statements -- billings totaled $1,573.35 a. Two stamped and initialed "KK" b. One stamped and initialed "MA" c. Two stamped with no initials 2. 18 register receipts -- totaling $3,515.72 a. Four register receipts stamped "Pd cash" and initialed "KK" b. 14 cannot verify who produced the receipts; not initialed As of July 24, 2012, I had concluded my investigation. My conclusions where (sic) that Kulhawik issued six documents with her initials and suspended statements for collection of 78 accounts involving 52 taxpayers, without any evidence that payments were made. The six taxpayers that I had conversations with indicated that they had paid cash, but could not describe who they made the payment to other than "a woman in the tax ofce." The Tax Collector has instituted policies and procedures regarding data recording. The policies include checks and balances which would make a similar manipulation nearly impossible to occur again without quick discovery. Based on my ndings, on July 24, 2012, I mailed a certied letter to Ms. Kulhawik requesting her presence on July 31, 2012 to review my ndings and suggestion of discipline. I also discussed my ndings with the City of Derby Police Department. Ms. Kulhawik retained legal counsel and had Union representation. In light of my ndings, I recommended to the Board of Aldermen to resolve all issues, including employment rights, by way of Agreement.