MOUNT CARMEL - A new treasurer will begin providing some much-needed oversight for the borough after numerous financial setbacks.

At Thursday's meeting, Ann Swartz was hired by Mount Carmel Borough Council as treasurer, effective today.

Swartz is office manager of the Mount Carmel Municipal Authority. As part of her position, she has kept the authority's books, which are managed in a similar fashion to the borough.

"We saw how good a job she did with the municipal authority and we wanted to get her," Tony Matulewicz, borough council president, said. "She's comfortable with it."

Swartz will have the treasurer duties added to her existing position for a pay bump of $1,500.

"She offered to do it for no money just to help us out but it does come with a salary," said Matulewicz. "We're giving an existing employee some extra money."

Borough manager Edward Cuff III has held the treasurer position since March 1, when the duties were shifted from Megan Janolek, current Lower Anthracite Transit System (LATS) director.

The position was opened in combination with the LATS director position after it was discovered that Janolek made numerous bookkeeping errors.

Janolek's behavior is not thought to be criminal, and there is no evidence that she stole any money.

Matulewicz said Tuesday the borough is still accepting applications for the LATS director position.

Janolek's errors have held up a mandatory audit of the borough's finances, resulting in the state Department of Community and Economic Development (DCED) warning the borough that it will become flagged; $552,378 in federal funding is at risk if the borough becomes flagged.

When an acceptable audit is turned in to DCED, the warning, or flag status should it reach that point, would be removed.

The borough is also currently flagged for its 2009 Community Development Block Grant (CDBG) Entitlement Grant.

Matulewicz said the borough's CDBG funding became problematic almost as soon as a financial plan was turned in for the multi-year streets and utility relocation project.

Because of the length of the project and the time it takes for the state to approve project schedules and distribute funding, some grant money would have been spent after the five-year cutoff, resulting in the flagged status, said Matulewicz.

A CDBG Flagged Activities Reporting Schedule Reason for Delay and Remediation Plan will be executed by Matulewicz to recover the borough's status.

An earlier story on the CDBG Flagged Activities Reporting Schedule Reason for Delay and Remediation Plan was unclear on which flagged item it concerned. The report will cover the earlier flagged project, which involves matters unrelated to Janolek's duties, and not the recent issues with Janolek's failure to provide an audit on time.

Matulewicz said Thursday that DCED is providing the borough with an extension on turning in Janolek's overdue audit.

The audit is now due Oct. 31.

The borough paid an independent accountant to repair Janolek's errors. Matulewicz previously estimated cost of the accountant at $2,000.

The borough's auditor, Courtney Solomon, of Herring, Roll & Solomon, P.C., is expected to return sometime next week, said Matulewicz.

Janolek continues to be employed by the borough as the LATS director. She was in attendance at Monday's council work session but was not present at Thursday's borough meeting.